SolarWinds Corp (SWI) 2024 Q2 法說會逐字稿

Thank you for standing by. My name is Alex, and I will be your conference operator today. At this time, I would like to welcome everyone to the SolarWinds 2024-second-quarter earnings call. (Operator Instructions)

謝謝你的支持。我叫亞歷克斯，今天我將擔任你們的會議操作員。此時此刻，我謹歡迎大家參加 SolarWinds 2024 年第二季財報電話會議。（操作員說明）

I would now like to turn the call over to Tim Karaca, Group Vice President, Finance. Please go ahead.

我現在想將電話轉給集團財務副總裁 Tim Karaca。請繼續。

Thank you. Good morning, everyone, and welcome to the SolarWinds second-quarter-2024 earnings call. With me today are Sudhakar Ramakrishna, our President and CEO; and Bart Kalsu, our CFO. Following our prepared remarks, we will have a question-and-answer session. This call is being simultaneously webcast on our Investor Relations website at investors.solarwinds.com. You can also find our earnings press release and the summary slide deck, which is intended to supplement our prepared remarks during today's call.

謝謝。大家早安，歡迎參加 SolarWinds 2024 年第二季財報電話會議。今天與我在一起的有我們的總裁兼執行長 Sudhakar Ramakrishna；和我們的財務長巴特·卡爾蘇 (Bart Kalsu)。在我們準備好的發言之後，我們將舉行問答環節。本次電話會議同時在我們的投資人關係網站 Investors.solarwinds.com 上進行網路直播。您還可以找到我們的收益新聞稿和幻燈片摘要，其旨在補充我們在今天的電話會議期間準備好的言論。

Please remember that certain statements made during this call are forward-looking statements, including those concerning our financial outlook, our market opportunities, our expectations regarding customer retention, our continued evolution to subscription-first mentality and the timing of phases of such evolution, our expectations regarding our partner ecosystem, the SEC enforcement action, the impact of the global economic and geopolitical environment on our business, and our gross level of debt.

請記住，本次電話會議期間所做的某些陳述均為前瞻性陳述，包括有關我們的財務前景、市場機會、我們對客戶保留的期望、我們向訂閱優先心態的持續演變以及這種演變的各個階段的時間安排、我們的對我們合作夥伴生態系統的期望、美國證券交易委員會的執法行動、全球經濟和地緣政治環境對我們業務的影響以及我們的總債務水平。

These statements are based on currently available information and assumptions, and we undertake no duty to update this information except as required by law. These statements are subject to a number of risks and uncertainties, including the numerous risks and uncertainties highlighted in today's earnings release, and our filings with the SEC. Copies are available from the SEC on our Investor Relations website.

這些聲明是基於目前可用的資訊和假設，除非法律要求，否則我們不承擔更新此資訊的義務。這些聲明受到許多風險和不確定性的影響，包括今天的收益報告以及我們向 SEC 提交的文件中強調的眾多風險和不確定性。副本可從美國證券交易委員會的投資者關係網站上取得。

We will discuss various non-GAAP financial measures on today's call. Unless otherwise specified, when we refer to financial measures, we will be referring to non-GAAP financial measures. A reconciliation of the differences between GAAP and non-GAAP financial measures and the definition of our other financial metrics discussed on today's call are available in our earnings press release and summary slide deck on our Investor Relations page of our website. Finally, we note that the financial results discussed on today's call and in our earnings release are preliminary and pending final review by us and our external auditors and will only be final once we file our quarterly report on Form 10-Q.

我們將在今天的電話會議上討論各種非公認會計準則財務指標。除非另有說明，當我們提到財務指標時，我們將指的是非公認會計準則財務指標。GAAP 和非 GAAP 財務指標之間的差異以及我們在今天電話會議上討論的其他財務指標的定義的調整可在我們網站的投資者關係頁面上的收益新聞稿和摘要幻燈片中找到。最後，我們注意到，今天的電話會議和收益發布中討論的財務結果是初步的，有待我們和外部審計師的最終審查，只有在我們提交 10-Q 表格季度報告後才會成為最終結果。

With that, I will now turn the call over to Sudhakar.

現在，我將把電話轉給蘇達卡爾。

Thank you, Tim, and good morning, everyone. Thank you for joining us today. As always, I'd like to thank our employees, customers, partners and shareholders for their ongoing commitment to SolarWinds.

謝謝蒂姆，大家早安。感謝您今天加入我們。一如既往，我要感謝我們的員工、客戶、合作夥伴和股東對 SolarWinds 的持續承諾。

I'm pleased to report that we delivered another strong quarter, once again exceeding our guidance across our key metrics and building on the momentum we have experienced in the last several quarters. I believe our team's continued focus on customer success and execution has positioned us well for a strong second half of 2024. We believe our performance in a challenging software spending environment demonstrates the compelling value we deliver to customers and the resiliency of our business model.

我很高興地向大家報告，我們又實現了強勁的季度業績，在關鍵指標方面再次超出了我們的指導，並在過去幾個季度所經歷的勢頭的基礎上再接再厲。我相信，我們團隊對客戶成功和執行的持續關注使我們能夠在 2024 年下半年取得強勁表現。我們相信，我們在充滿挑戰的軟體支出環境中的表現證明了我們為客戶提供的令人信服的價值以及我們業務模式的彈性。

Now, turning to business highlights from this quarter. First, our subscription-first strategy continued to bear fruit, and we are experiencing strong subscription revenue and ARR growth. Second, our customer retention metrics remained robust, highlighting the compelling value proposition of our platform. Third, we saw increasing adoption of and traction for our observability solution. And fourth, we continued with our ongoing product innovation, driven by our focus to improve productivity, reduce complexity and improve cost effectiveness for our customers.

現在，轉向本季的業務亮點。首先，我們的訂閱優先策略持續取得成果，我們正在經歷強勁的訂閱收入和 ARR 成長。其次，我們的客戶保留指標仍然強勁，凸顯了我們平台引人注目的價值主張。第三，我們看到我們的可觀測性解決方案的採用率和吸引力不斷增加。第四，我們持續進行持續的產品創新，重點在於為客戶提高生產力、降低複雜性和提高成本效益。

I will now touch on some of these before turning the call over to Bart for more color on the quarter and our financial outlook for the remainder of the year. In Q2 2024, we delivered total revenue of $193 million, above the high end of the guidance range we provided and representing year-over-year growth of 4%. We continue to see success with our subscription-first strategy and delivered year-over-year subscription revenue growth of 31% and subscription ARR growth of 36% in the second quarter.

現在，我將談論其中的一些內容，然後再將電話轉給巴特，以了解有關本季度的更多資訊以及我們今年剩餘時間的財務前景。2024 年第二季度，我們實現了 1.93 億美元的總收入，高於我們提供的指導範圍的上限，同比增長 4%。我們的訂閱優先策略持續取得成功，第二季訂閱營收年增 31%，訂閱 ARR 成長 36%。

Our second quarter, in-quarter maintenance and renewal rate was 97%, and our trailing 12-month maintenance renewal rate was 97%, consistent with last quarter and up from 94% in the same quarter of the prior year. We delivered second-quarter total ARR growth of 7% year over year, passing the $700 million mark in total ARR. We exceeded $100 million in total ARR for our hybrid cloud observability solutions, a significant milestone that is the result of the ongoing conversion of our maintenance base as well as the acquisition of new customers.

我們第二季的季度維護和續訂率為 97%，過去 12 個月的維護續訂率為 97%，與上季一致，高於去年同期的 94%。我們第二季的總 ARR 年增 7%，總 ARR 突破 7 億美元大關。我們的混合雲端可觀測性解決方案的總 ARR 超過了 1 億美元，這是一個重要的里程碑，這是我們維護基礎不斷轉換以及收購新客戶的結果。

As I shared last quarter, we believe that tools consolidation, cloud modernization and simplicity are the key driving factors and represents significant incremental future opportunity for us. We recorded double-digit adjusted EBITDA growth of 17% year over year and another quarter of achieving the Rule of 50. And finally, in July, we refinanced and extended our debt with another 50 basis point of rate reduction, which Bart will highlight further.

正如我上季度分享的那樣，我們相信工具整合、雲端現代化和簡單性是關鍵的驅動因素，並為我們帶來了巨大的增量未來機會。我們實現了 17% 的兩位數調整後 EBITDA 年成長，又一個季度實現了 50 法則。最後，在 7 月份，我們再融資並延長了債務期限，利率又降低了 50 個基點，巴特將進一步強調這一點。

Turning to our product portfolio. We continue to believe that our multi-faceted solutions deliver the best time to value, time to detect and time to remediate issues across on-premises, cloud and hybrid environments. We believe that our observability, database performance and service management offerings are the most comprehensive in the industry and help customers reduce costs, while enabling them to accelerate their business transformation.

轉向我們的產品組合。我們仍然相信，我們的多方面解決方案可以在本地、雲端和混合環境中提供最佳的價值實現時間、檢測時間和修復問題時間。我們相信，我們的可觀察性、資料庫效能和服務管理產品是業界最全面的，可以幫助客戶降低成本，同時使他們能夠加速業務轉型。

I will now provide some product and solution updates that are aimed at the diverse and changing needs of our customers. We continue to enhance device and node support in our HCO solutions, giving us the opportunity to expand our footprint in customers' environments and to help them consolidate their tools further. We enhanced our support for Azure and AWS cloud and strive to continue to eliminate visibility gaps for our customers while improving their productivity and reducing their costs.

我現在將提供一些產品和解決方案更新，以滿足客戶多樣化和不斷變化的需求。我們繼續增強 HCO 解決方案中的設備和節點支持，使我們有機會擴大我們在客戶環境中的足跡，並幫助他們進一步整合工具。我們增強了對 Azure 和 AWS 雲端的支持，並努力繼續消除客戶的可見性差距，同時提高他們的生產力並降低成本。

Hybrid observability is a cornerstone of our observability solution. We enhanced the database performance analyzers, helping enterprises maximize performance and migration of their PostgreSQL databases across on-premises and cloud environments. We continue to further simplify the packaging of our database solutions to give customers the opportunity to experience the full breadth of our solutions. We believe we can expand our business further with these modifications.

混合可觀測性是我們可觀測性解決方案的基石。我們增強了資料庫效能分析器，幫助企業最大限度地提高 PostgreSQL 資料庫在本地和雲端環境中的效能和遷移。我們繼續進一步簡化資料庫解決方案的包裝，讓客戶有機會體驗我們全面的解決方案。我們相信，透過這些修改，我們可以進一步擴大我們的業務。

And we launched our free ITSM maturity model, a purpose-built and free tool for enterprises to evaluate and assess their existing ITSM practices. This tool also provides a road map for improving operational excellence and service delivery while reducing costs. I have previously described how our AIOps is leveraged to reduce alert fatigue and determine root cause analysis to further reduce mean time to detect and remediate issues, and how we are developing tools that in the future will allow us to implement predictive analytics into our observability solution.

我們還推出了免費的 ITSM 成熟度模型，這是一個專門建立的免費工具，供企業評估和評估其現有的 ITSM 實踐。該工具還提供了在降低成本的同時提高卓越營運和服務交付的路線圖。我之前已經描述過如何利用我們的AIOps 來減少警報疲勞並確定根本原因分析，以進一步減少檢測和修復問題的平均時間，以及我們如何開發工具，以便將來能夠將預測分析實施到我們的可觀測性解決方案中。

I'll now touch on AI extensions in our service desk solution that we announced in May as well as highlight our AI by Design principles that'll form a framework guiding our efforts across our portfolio. The ITSM extensions are designed to transform IT operations by improving workflows, accelerating remediation processes from days or hours to minutes using LLM and our own proprietary algorithms. Our SolarWinds AI is designed to allow a service desk assistant to instantly summarize ticket histories, suggest agent responses, and create real-time recommended steps for resolving issues.

現在，我將介紹我們在 5 月宣布的服務台解決方案中的 AI 擴展，並重點介紹我們的 AI by Design 原則，這些原則將形成一個框架，指導我們在整個產品組合中的工作。ITSM 擴展旨在透過改進工作流程、使用 LLM 和我們自己的專有演算法將修復過程從幾天或幾小時縮短到幾分鐘來轉變 IT 營運。我們的 SolarWinds AI 旨在允許服務台助理立即總結票證歷史記錄、建議客服人員回應並建立即時建議步驟來解決問題。

With the ever evolving nature of artificial intelligence, we knew it was essential that this and all future AI tools we build are carefully architected with security in mind. That is why we introduced our new AI by Design principles, an extension of the Secure by Design principles that have guided our approach to security since 2021. These principles, which are privacy and security, accountability and fairness, transparency and trust, simplicity and accessibility, are an evolving framework to help customers establish a lasting relationship with AI built on security and productivity. Like Secure by Design, we believe our AI by Design principles should guide our industry as we enter and navigate the future of artificial intelligence.

隨著人工智慧不斷發展的本質，我們知道我們建造的這個以及所有未來的人工智慧工具都必須在精心設計的基礎上考慮到安全性。這就是為什麼我們引入了新的人工智慧設計原則，這是自 2021 年以來指導我們安全方法的安全設計原則的延伸。這些原則包括隱私和安全、問責和公平、透明度和信任、簡單性和可訪問性，是一個不斷發展的框架，可幫助客戶與建立在安全性和生產力基礎上的人工智慧建立持久的關係。與「安全設計」一樣，我們相信「人工智慧設計」原則應該在我們進入並駕馭人工智慧的未來時指導我們的產業。

As we pass the halfway point of the year, we are on track to deliver on our 2024 priorities we provided earlier this year. First, extending our SolarWinds platform and delivering effective solutions built to help customers achieve hybrid visibility and to manage their hybrid and multi-cloud environments. Second, investing selectively while continuing to exercise expense discipline and expanding profitability. Third, focusing on subscription and ARR growth, customer success and retention, growing profitability and cash flow, and creating more value for our shareholders.

今年已過半，我們預計將實現今年稍早提出的 2024 年優先事項。首先，擴展我們的 SolarWinds 平台並提供有效的解決方案，旨在幫助客戶實現混合可視性並管理其混合和多雲環境。其次，選擇性地進行投資，同時繼續實行費用紀律並擴大獲利能力。第三，專注於訂閱量和ARR成長、客戶成功和保留、獲利能力和現金流的成長以及為股東創造更多價值。

I'm pleased with our execution against these priorities. Our strong foundation is the result of transformational efforts made across all aspects of our business, and I believe that we are set up for continued success in the second half of the year.

我對我們對這些優先事項的執行感到滿意。我們堅實的基礎是我們業務各個方面所做的轉型努力的結果，我相信我們已準備好在下半年繼續取得成功。

Before I turn the call over to Bart, I want to acknowledge that this is Bart's last SolarWinds earnings call. As we announced in June, Bart will be moving on to pursue the next chapter in his career later this month. Bart has been my partner from the day I joined in this transformation journey. On behalf of all SolarWinds, Bart, I express my heartfelt gratitude to you for your many contributions and wish you great health and much success in your future endeavors.

在將電話轉給 Bart 之前，我想確認這是 Bart 的最後一次 SolarWinds 財報電話會議。正如我們在六月宣布的那樣，巴特將於本月晚些時候繼續開啟他職業生涯的下一個篇章。從我加入這趟轉型之旅的那天起，巴特就一直是我的合作夥伴。Bart，我謹代表所有 SolarWinds 對您所做的貢獻表示衷心感謝，並祝您身體健康，在未來的工作中取得成功。

I want to welcome Lewis Black, who is joining us this month as our Chief Financial Officer. With over 25 years of experience in finance and operating roles, Lewis's experience in transforming technology companies will be crucial for our next phase of growth. Lewis is with me in the room today and looking forward to engaging closely with all of you going forward.

我要歡迎劉易斯布萊克 (Lewis Black)，他將於本月加入我們，擔任我們的財務長。Lewis 在財務和營運方面擁有超過 25 年的經驗，他在科技公司轉型方面的經驗對於我們下一階段的成長至關重要。路易斯今天和我一起在房間裡，期待與你們所有人密切接觸。

With that, I will now turn it over to Bart to expand on our financial performance and provide our third-quarter and full-year-2024 outlook. Bart?

現在，我將把它交給 Bart，詳細介紹我們的財務業績，並提供我們對 2024 年第三季和全年的展望。巴特？

Thanks, Sudhakar. It has been a privilege to be a part of SolarWinds over the past 17 years, and we are in great hands with Lewis taking over as the CFO. We had another strong quarter, and the second quarter was a continuation of the momentum from the first. We remain confident in our business and financial goals for the remainder of 2024. Despite what continues to be a challenging IT spending environment, we continue to see strong growth in the mix of predictable recurring revenue and have delivered sustained ARR growth.

謝謝，蘇達卡爾。在過去的 17 年裡，我們很榮幸能夠成為 SolarWinds 的一員，而且 Lewis 接任財務長後，我們得到了很好的幫助。我們又經歷了一個強勁的季度，第二季度延續了第一季的動能。我們對 2024 年剩餘時間的業務和財務目標仍然充滿信心。儘管 IT 支出環境仍然充滿挑戰，但我們繼續看到可預測的經常性收入組合的強勁成長，並實現了持續的 ARR 成長。

Turning to the numbers. We finished the second quarter with total revenue of $193.3 million, a 4% increase compared to the prior year and above the high end of the outlook for total revenue of $191 million that we provided last quarter. We ended the second quarter with total ARR of $705 million, up 7% year over year. Our subscription ARR at the end of the second quarter was $270 million, an increase of 36% year over year. This growth continues to be driven by our execution of our subscription-first strategy.

轉向數字。我們第二季的總營收為 1.933 億美元，比上年成長 4%，高於我們上季提供的總營收 1.91 億美元的預期上限。第二季末，我們的總 ARR 為 7.05 億美元，年增 7%。第二季末我們的訂閱 ARR 為 2.7 億美元，年增 36%。這種成長持續受到我們執行訂閱優先策略的推動。

We had 1,042 customers with over $100,000 of total ARR, representing 16% growth over the prior year. Digging into the revenue details, our second-quarter subscription revenue was $70 million, up 31% year over year. The increase in subscription revenue continues to reflect the success of our subscription-first strategy, which includes converting a portion of our maintenance base to our subscription products. Maintenance revenue was $110 million in the second quarter, down 5% compared to the prior year. Such decline was expected as we continue to convert existing customers to our hybrid cloud observability product.

我們有 1,042 名客戶，總 ARR 超過 10 萬美元，比上一年增長 16%。深入研究收入細節，我們第二季的訂閱收入為 7000 萬美元，年增 31%。訂閱收入的成長繼續反映了我們訂閱優先策略的成功，其中包括將我們的部分維護基礎轉換為我們的訂閱產品。第二季維護收入為 1.1 億美元，比去年同期下降 5%。隨著我們繼續將現有客戶轉向我們的混合雲可觀測性產品，這種下降是預料之中的。

Our maintenance renewal rate is at 97% on a trailing 12-month basis and was 97% for the second quarter. To remind you, as we convert maintenance customers to subscriptions, we exclude those customers from this renewal rate calculation. As a result of the subscription revenue growth and strong maintenance renewal rates, we now have 93% of our total revenue as recurring revenue. For the second quarter, license revenue was $13 million, down 17% from $16 million in the second quarter of 2023. As a reminder, our subscription-first focus has affected and will continue to affect our license sales performance.

過去 12 個月的維護續約率為 97%，第二季為 97%。提醒您，當我們將維護客戶轉換為訂閱客戶時，我們會將這些客戶排除在續訂率計算之外。由於訂閱收入的成長和強勁的維護續訂率，我們現在的經常性收入佔總收入的 93%。第二季授權收入為 1,300 萬美元，比 2023 年第二季的 1,600 萬美元下降 17%。提醒一下，我們對訂閱優先的關注已經並將繼續影響我們的許可證銷售業績。

Our focus on operating discipline continues to drive strong results, and we delivered another quarter of strong non-GAAP profitability. Second-quarter adjusted EBITDA was $92.5 million, growing 17% year over year, representing an adjusted EBITDA margin of 48% and coming in $4.5 million above the high end of the $88 million outlook we gave for the second quarter. Turning to our balance sheet.

我們對營運紀律的關注繼續推動強勁的業績，並且我們又一個季度實現了強勁的非公認會計準則獲利能力。第二季調整後 EBITDA 為 9,250 萬美元，年增 17%，調整後 EBITDA 利潤率為 48%，比我們給出的第二季預期 8,800 萬美元的上限高出 450 萬美元。轉向我們的資產負債表。

Our net leverage ratio at June 30 was approximately 3 times our trailing 12-month adjusted EBITDA. This compares to 2.7 times at the end of the first quarter. The increase is due to the special dividend of $168 million that was declared in the first quarter and paid in April.

截至 6 月 30 日，我們的淨槓桿比率約為過去 12 個月調整後 EBITDA 的 3 倍。相比之下，第一季末為 2.7 倍。這一增長是由於第一季宣布並於 4 月支付的 1.68 億美元特別股息所致。

In July of 2024, we again refinanced our term loan, decreasing the interest rate by 50 basis points from SOFR plus 3.25% to SOFR plus 2.75%. In addition, we extended the maturity to February 2030, which we believe showcases the stability and recurring nature of our business. We will continue to attempt to take advantage of the interest rate environment and look for opportunities to further reduce our variable interest rate as we move forward.

2024 年 7 月，我們再次為定期貸款再融資，利率降低 50 個基點，從 SOFR 加 3.25% 降至 SOFR 加 2.75%。此外，我們將期限延長至 2030 年 2 月，我們相信這展示了我們業務的穩定性和經常性。我們將繼續嘗試利用利率環境，並在前進過程中尋找進一步降低可變利率的機會。

We continue to generate strong cash flow with $73.4 million in cash flow from operations in the six months ended June 30. Our cash and cash equivalents and short-term investment balance at quarter end was $169.6 million. Our non-GAAP diluted earnings per share were $0.26 above the guidance range of $0.21 to $0.23 per share. Most of this beat is driven by our improved profitability.

截至 6 月 30 日的六個月中，我們繼續產生強勁的現金流，營運現金流達 7,340 萬美元。季度末我們的現金和現金等價物以及短期投資餘額為 1.696 億美元。我們的非 GAAP 攤薄每股收益比每股 0.21 美元至 0.23 美元的指導範圍高出 0.26 美元。這一成長的主要原因是我們獲利能力的提高。

I'll now walk you through our outlook before turning it over to Sudhakar for final thoughts. I will start with our third-quarter guidance, and then discuss our updated outlook for the full year.

現在，我將向您介紹我們的前景，然後將其交給 Sudhakar 進行最後的思考。我將從我們的第三季指導開始，然後討論我們更新的全年展望。

For the third quarter, we expect total revenue to be in the range of $191 million to $196 million, representing 2% growth at the midpoint. Adjusted EBITDA for the third quarter is expected to be approximately $90 million to $93 million, representing 8% growth at the midpoint. Non-GAAP fully diluted earnings per share are projected to be $0.24 to $0.26 per share, assuming an estimated 173.6 million fully diluted shares outstanding. And finally, our outlook for the third quarter assumes a non-GAAP tax rate of 26%, and we expect to pay approximately $8 million in cash taxes during the quarter.

我們預計第三季總營收將在 1.91 億美元至 1.96 億美元之間，中位數成長 2%。第三季調整後 EBITDA 預計約 9,000 萬至 9,300 萬美元，中位數成長 8%。假設完全稀釋已發行股票數量估計為 1.736 億股，非 GAAP 完全稀釋每股盈餘預計為每股 0.24 至 0.26 美元。最後，我們對第三季的展望假設非 GAAP 稅率為 26%，我們預計在該季度支付約 800 萬美元的現金稅。

For the full year, we are raising the revenue guidance and expect total revenue to be in the range of $778 million to $788 million, representing 3% year-over-year growth at the midpoint. We are also raising our adjusted EBITDA for the year, which is now expected to be approximately $368 million to $375 million, representing 13% year-over-year growth at the midpoint. Non-GAAP fully diluted earnings per share are projected to be $1.04 to $1.08 per share, assuming an estimated 173.8 million fully diluted shares outstanding. Our full-year and third-quarter guidance assumes a euro to dollar exchange rate of $1.06 to $1.00.

對於全年，我們提高了收入指引，預計總收入將在 7.78 億美元至 7.88 億美元之間，中間值將年增 3%。我們也提高了今年調整後的 EBITDA，目前預計約 3.68 億美元至 3.75 億美元，中間值年增 13%。假設完全稀釋已發行股票數量估計為 1.738 億股，非公認會計準則完全稀釋每股盈餘預計為每股 1.04 至 1.08 美元。我們的全年和第三季指引假設歐元兌美元匯率為 1.06 美元至 1.00 美元。

With that, I'll return the call to Sudhakar for his closing remarks.

接下來，我將回電給蘇達卡爾，請他作結語。

Thank you, Bart. I'm very excited about our progress in the second quarter evidenced by another strong performance on both revenue and adjusted EBITDA. We pride ourselves on delivering against our objectives, and our team's execution focus continued to yield results.

謝謝你，巴特。我對第二季的進展感到非常興奮，營收和調整後 EBITDA 的強勁表​​現就證明了這一點。我們為能夠實現我們的目標而感到自豪，我們團隊的執行重點繼續取得成果。

Secure by Design is the first major initiative I started a few days after I joined the company in January 2021. Our focus on continuous improvement, transparency and public-private partnerships has been unwavering. Against this backdrop, it is very gratifying for us that Judge Engelmayer largely agreed with our motion to dismiss the SEC's claims in his order on Thursday, July 18.

Secure by Design 是我在 2021 年 1 月加入公司幾天後啟動的第一個重大計劃。我們始終堅定不移地致力於持續改善、透明度和公私夥伴關係。在此背景下，令我們感到非常欣慰的是，Engelmayer 法官在 7 月 18 日星期四的命令中基本上同意我們駁回 SEC 主張的動議。

As we said in our public statement on the order, we look forward to the next stage where we will have the opportunity to present our evidence and to demonstrate why the remaining claim is factually inaccurate. In the meantime, we continue to focus on our mission to help customers accelerate their business transformations in multi-cloud environments and remain grateful for the support we have received from so many. Customers are constantly adapting to the rapid growth and innovation in our work, and we believe that our purpose of enriching their lives makes us uniquely qualified to serve them.

正如我們在有關該命令的公開聲明中所說，我們期待下一階段，我們將有機會提供證據並證明為什麼其餘的主張實際上不準確。同時，我們繼續專注於幫助客戶在多雲環境中加速業務轉型的使命，並對我們所獲得的眾多支援表示感謝。客戶不斷適應我們工作的快速成長和創新，我們相信，豐富他們的生活的目的使我們有獨特的資格為他們服務。

In a world where budgets are constrained and complexity continues to grow, our solutions empower customers in all stages of their cloud transformation to achieve hybrid visibility and to cost effectively manage their assets. I'm as confident as ever in our ability to adapt to evolving customer needs and to continue to deliver compelling value. Our continued focus on customer success has not only helped us beat our stated financial goals, but also increase our revenue and adjusted EBITDA outlook for the year. I'm extremely proud of our team's efforts to deliver customer success, and again, thank our employees, partners, customers and shareholders for their commitment to SolarWinds.

在預算有限且複雜性持續成長的世界中，我們的解決方案使客戶能夠在雲端轉型的各個階段實現混合可見性並以經濟高效的方式管理其資產。我一如既往地相信我們有能力適應不斷變化的客戶需求並繼續提供令人信服的價值。我們對客戶成功的持續關注不僅幫助我們實現了既定的財務目標，而且還增加了我們的收入並調整了今年的 EBITDA 前景。我對我們的團隊為客戶取得成功所做的努力感到非常自豪，並再次感謝我們的員工、合作夥伴、客戶和股東對 SolarWinds 的承諾。

Bart and I are now happy to address your questions.

巴特和我現在很高興回答您的問題。

(Operator Instructions) Pinjalim Bora, JPMorgan.

（操作員指令）Pinjalim Bora，摩根大通。

Congrats on a good quarter. I want to ask you about the macroenvironment overall. During the quarter, it seems like there's a lot of conflicting signals that we are getting. But what did you see during the quarter? How was the linearity in the quarter? And maybe, talk about the pipeline going into Q3 and the second half?

恭喜季度表現良好。我想問整體的宏觀環境。在本季度，我們似乎收到了很多相互矛盾的訊號。但您在本季看到了什麼？本季的線性度如何？也許，談談進入第三季和下半年的管道？

Pinjalim, thanks for the question. Hope you're doing well. From our vantage point, there has not been any meaningful difference in macro from, let's say, Q1 to Q2 or in the first half of this year, as in either significant positive progress or any material deterioration. The value prop that our solutions continue to drive for our customers, that being improved tools consolidation, delivering hybrid visibility and helping them transition to cloud or SaaS at the pace at which they dictate, giving them future-proof road maps with extensions via AI by Design that I described, they're all resonating. And as you know, we have a very large and very diversified customer base as well, and that's come in very, very handy for us.

Pinjalim，謝謝你的提問。希望你一切都好。從我們的角度來看，從第一季到第二季或今年上半年，宏觀方面沒有任何有意義的差異，無論是重大積極進展還是任何實質惡化。我們的解決方案繼續為客戶帶來的價值支柱是改進工具整合、提供混合可視性並幫助他們按照他們指定的速度過渡到雲端或SaaS，為他們提供面向未來的路線圖，並透過人工智慧進行擴展我所描述的設計，它們都引起了共鳴。如您所知，我們也擁有非常龐大且非常多元化的客戶群，這對我們來說非常非常方便。

In terms of pipeline, I would say the same. We continue to focus on our pipeline generation activities. We are extending our partnerships. I'm sure you are familiar with our Transform Partner program, and we've been enlisting additional partners that help us extend our customer reach while continuing to be focused on our expense discipline methodologies.

就管道而言，我也會這麼說。我們繼續專注於我們的管道生成活動。我們正在擴大我們的合作夥伴關係。我相信您熟悉我們的轉型合作夥伴計劃，我們一直在招募更多合作夥伴來幫助我們擴大客戶範圍，同時繼續專注於我們的費用紀律方法。

Understood. One question on AI by Design philosophy that you have. Are we going to see most of these AI capabilities, including the one in the service desk in cloud? And do we expect that to be a motivation to accelerate migration towards cloud for some of the customers? And maybe, the second part to that is, how are you monetizing the service desk AI product?

明白了。您有一個關於人工智慧設計理念的問題。我們是否會看到大部分人工智慧功能，包括雲端服務台中的功能？我們是否期望這成為​​一些客戶加速向雲端遷移的動力？也許，第二部分是，您如何透過服務台人工智慧產品貨幣化？

Absolutely. First thing, Pinjalim, I'll highlight is AI is not restricted only to our service desk product. We had introduced AIOps concepts into our observability platform in the context of alert stacking, productivity improvement, time to remediate efficiencies and so on. And so, that set of principles will permeate through the portfolio. Now, with regards to the service management product, the AI capabilities will be in one of our premier-tier products which has a higher ASP, and we are already seeing some initial traction around that.

絕對地。首先，Pinjalim，我要強調的是，人工智慧不僅限於我們的服務台產品。我們在警報堆疊、生產力提高、修復效率的時間等方面將 AIOps 概念引入了我們的可觀察性平台。因此，這套原則將滲透到整個產品組合中。現在，就服務管理產品而言，人工智慧功能將出現在我們具有更高平均售價的頂級產品之一中，我們已經看到了一些初步的吸引力。

As to motivation for customers to move to the cloud, the way I look at it is customers -- our customers already have a choice today of deploying in the cloud. But even the customers that deployed in a self-hosted configuration can leverage our AI capabilities by essentially connecting to the cloud. So in other words, their entire deployment need not be in the cloud, but just the AI extensions can be. And so, that's the flexibility that we offer our customers.

至於客戶遷移到雲端的動機，我的看法是客戶——我們的客戶今天已經可以選擇在雲端部署。但即使是部署在自託管配置中的客戶也可以透過本質上連接到雲端來利用我們的人工智慧功能。換句話說，他們的整個部署不需要在雲端，而只需人工智慧擴展即可。這就是我們為客戶提供的彈性。

Schulz, Patrick.

舒茲、派崔克.

Maybe for Sudhakar. Just growth from the large customers over $100,000 ARR has been very consistent in the past several quarters. How big of a driver is the hybrid cloud observability solution for this cohort? And what does adoption look like there?

也許是為了蘇達卡爾。過去幾個季度，ARR 超過 10 萬美元的大客戶的成長一直非常穩定。混合雲可觀測性解決方案對這群人的驅動力有多大？那裡的收養是什麼樣的？

I didn't catch the last part of your question.

我沒聽清楚你問題的最後一部分。

With the larger customer cohort, just how big of a driver is the hybrid cloud observability solution? And what does the adoption look like?

隨著客戶群的擴大，混合雲端可觀測性解決方案的驅動力到底有多大？收養是什麼樣的？

Got it. First, it is a significant driver for, not just that cohort but across the board. For the primary reasons that I have been highlighting, which is, we give the most elegant tools consolidation story for our customers. We give the most elegant hybrid visibility story for our customers where they can start in a self-hosted fashion and extend into the cloud. And of course, the simplicity of packaging and pricing is extremely appealing to our customers across the board.

知道了。首先，它不僅是這群人的重要驅動力，也是全面的驅動力。出於我一直強調的主要原因，我們為客戶提供了最優雅的工具整合故事。我們為客戶提供最優雅的混合可見性故事，他們可以以自架的方式開始並擴展到雲端。當然，簡單的包裝和定價對我們的所有客戶都極具吸引力。

It does apply more broadly to the larger enterprise customers or larger customers in general because they tend to have more tools, they tend to be a bit more fragmented. And therefore, in this environment, it's a lot more compelling if we can consolidate their tools.

它確實更廣泛地適用於大型企業客戶或一般大型客戶，因為他們往往擁有更多工具，而且往往更加分散。因此，在這種環境下，如果我們能夠整合他們的工具，就會更具吸引力。

Okay. Very helpful. And then, Bart, maybe one for you. I guess, first, congrats on a successful tenure with SolarWinds and best of luck with your next venture. We're going to miss working with you. But looking at the guidance for the Q3 particularly, I mean, guidance is just 2% for next quarter. After the first half of the year, grew 4%. And you mentioned that there's been very little change in the macro backdrop. So can you just help bridge that delta there?

好的。非常有幫助。然後，巴特，也許有一個適合你。我想，首先，恭喜您在 SolarWinds 取得成功，並祝您下一次創業好運。我們會想念與你一起工作的。但特別是看看第三季的指導，我的意思是，下一季的指導僅為 2%。上半年之後，成長了4%。您提到宏觀背景變化很小。那麼你能幫忙彌合那裡的三角洲嗎？

Yeah. What I'd say is it's very consistent with the way we've guided for the first half of the year. We tried to keep guidance somewhat in line with what our performance is. We try to be prudent when we provide guidance, and we want to give numbers that we feel confident that we can hit.

是的。我想說的是，這與我們今年上半年的指導方式非常一致。我們試著讓指引與我們的表現保持一定的一致。我們在提供指導時會盡量保持謹慎，並且希望給出我們有信心能夠達到的數字。

Okay. That's helpful. Thank you, guys.

好的。這很有幫助。謝謝你們，夥計們。

That concludes our Q&A session. I will now turn the conference back over to Mr. Sudhakar for closing remarks.

我們的問答環節到此結束。我現在將會議轉回由蘇達卡爾先生致閉幕詞。

Yes. There are a couple actually wireless callers. We couldn't get the name. And so, hands up. Can we check? I see a number with 404276, as the next question.

是的。有幾個實際上是無線呼叫者。我們無法得知名字。所以，舉起手來。我們可以檢查一下嗎？我看到一個數字 404276，作為下一個問題。

This is Miller Jump with Truist Securities. My congrats to Bart for the work you've done with SolarWinds and on the next step in your career. It's a question for either of you. EBITDA margins have been remarkably strong. You obviously recently restructured the debt. So I'm just curious, do you also see any opportunities from here to increase investments to maybe drive growth in either the go-to-market or product side of the business right now?

我是 Truist 證券公司的 Miller Jump。我祝賀 Bart 在 SolarWinds 所做的工作以及您職業生涯的下一步。這是你們兩個人的問題。EBITDA 利潤率非常強勁。顯然你最近重組了債務。所以我很好奇，您是否也看到了增加投資的機會，以推動目前業務進入市場或產品的成長？

Yeah, we continue to evaluate our investment opportunities and our focus is on balancing growth and profitability. As I've described in the past several times, in fact, our goal is to consistently deliver mid-40s EBITDA margins, and we are, as you highlighted, meaningfully above that. So as we look at the second half and also into 2025, we continually focus on how do we accelerate our road map, how do we get better efficiencies while scaling our go-to market as well. So short answer to your question is yes, but this will be weighted against growth prospects, macro conditions, efficiencies and sustainability.

是的，我們繼續評估我們的投資機會，我們的重點是平衡成長和獲利能力。正如我過去多次描述的那樣，事實上，我們的目標是始終如一地實現 40 多歲左右的 EBITDA 利潤率，正如您所強調的那樣，我們遠遠高於這一目標。因此，當我們展望下半年以及 2025 年時，我們將繼續關注如何加快我們的路線圖，如何在擴大我們的進入市場的同時提高效率。所以對你的問題的簡短答案是肯定的，但這將根據成長前景、宏觀條件、效率和永續性進行權衡。

Got it. That makes sense. And maybe just one more. The subscription ARR sustaining its momentum against sequentially tougher comps now. Just curious if there's anything from the go-to-market side that you're seeing or that you've changed there that you think is driving this uptick and momentum we're seeing this year?

知道了。這是有道理的。也許還有一個。現在，訂閱 ARR 與連續更嚴格的比較相比，保持了其勢頭。只是好奇您是否看到了進入市場方面的任何變化，或者您認為哪些變化推動了我們今年看到的這種上升和勢頭？

It's a continued focus on the execution of our strategy that we outlined in 2021, which is a subscription-first motion. But as I've always described it, it's not just a business model transition, it's a value model transition for us. So our products are delivering better value, our observability solutions, database solutions, service management solutions continue to be extended to provide better value to customers. And it happens that when they procure it, they procure it in a subscription arrangement, and that's what's driving the growth.

我們將繼續關注我們在 2021 年制定的策略的執行，即訂閱優先動議。但正如我一直所描述的那樣，這不僅僅是商業模式的轉變，更是我們價值模式的轉變。所以我們的產品正在提供更好的價值，我們的可觀測性解決方案、資料庫解決方案、服務管理解決方案不斷擴展，為客戶提供更好的價值。碰巧，當他們採購它時，他們是透過訂閱安排來採購的，這就是推動成長的原因。

Next question comes from the line of (626) 510-3317 with Morgan Stanley.

下一個問題來自摩根士丹利 (Morgan Stanley) 的 (626) 510-3317。

This is Oscar Saavedra from Morgan Stanley on for Sanjit Singh. So my question is around, maybe some color on guidance, right? We've seen others in software actually cutting guidance. So maybe what gives you that confidence to actually raise it? And maybe, to what extent is SaaS a result of maybe seeing stronger than -- or maybe an improvement in the pace of maintenance to subscription migration?

我是摩根士丹利的奧斯卡·薩維德拉 (Oscar Saavedra)，代表桑吉特·辛格 (Sanjit Singh)。所以我的問題是，也許有一些指導的顏色，對吧？我們已經看到軟體領域的其他人實際上在削減指導。那麼，是什麼讓你有信心真正提升它呢？也許，SaaS 在多大程度上是因為訂閱遷移的維護速度比——或者可能是改進的結果？

Yeah, good question. We've outperformed for the first half of the year as far as the guidance that we gave. And there's really nothing in what we're seeing in the macroenvironment as well as our own internal demand that makes us see things any differently, so it gives us the confidence to go ahead and raise for the back half of the year.

是的，好問題。就我們給予的指導而言，我們今年上半年的表現優於大盤。我們所看到的宏觀環境以及我們自己的內部需求實際上並沒有讓我們對事情有任何不同的看法，因此這讓我們有信心繼續為下半年籌集資金。

The good thing for us is a big piece of our bookings comes from existing customers. And like Sudhakar talked about, our customers see the value in our products, and they see the value and the transformation to both our hybrid cloud observability as well as our SaaS products.

對我們來說，好處是我們很大一部分的預訂來自現有客戶。正如 Sudhakar 所說，我們的客戶看到了我們產品的價值，他們看到了我們的混合雲可觀測性以及 SaaS 產品的價值和轉型。

I guess the second part of it was, to what extent maybe are you seeing an increase in the pace of those migrations? Or is it still going at the same pace that it historically has?

我想第二部分是，您可能會看到這些遷移的速度增加到什麼程度？或者它仍然以歷史上同樣的速度發展嗎？

For the most part, we have been achieving our plans and expanding our market opportunities. So in terms of accelerating, the approach that we have taken has enabled our partners worldwide now. So the way to think about our conversions is we started first in North America, then we expanded into EMEA and now on to APJ. So it's more breadth of conversion across all our regions, and we've seen consistent results across geographies. And as more partners and more of our sales teams make that the primary motion, we expect to see this momentum.

在很大程度上，我們一直在實現我們的計劃並擴大我們的市場機會。因此，就加速而言，我們採取的方法現在已經使我們全球的合作夥伴受益。因此，考慮我們的轉換的方法是，我們首先從北美開始，然後擴展到歐洲、中東和非洲，現在擴展到亞太及日本地區。因此，我們所有地區的轉換範圍更廣，而且我們在各個地區都看到了一致的結果。隨著越來越多的合作夥伴和更多的銷售團隊將此作為主要動議，我們預計會看到這種勢頭。

Mr. Sanjit Singh, Morgan Stanley.

桑吉特辛格先生，摩根士丹利。

This is Sanjit. Sorry, I was toggling between multiple calls this morning. To follow up on Oscar's question, Bart, when I look at the subscription ARR performance and the total ARR performance, the growth rates are sustained. I think it was 36% subscription ARR, total ARR growing 7%, two quarters in a row. So it seems like sustained growth there.

這是桑吉特。抱歉，今天早上我在多個電話之間切換。為了跟進 Oscar 的問題，Bart，當我查看訂閱 ARR 表現和總 ARR 表現時，成長率是持續的。我認為訂閱 ARR 為 36%，總 ARR 連續兩季成長 7%。因此，那裡似乎持續增長。

When I look at the subscription revenue, it seems like it's flatlining in the $69 million to $70 million range. It's been really picking up in terms of dollars quarter over quarter in the multiple quarters prior to that. Can you help me understand why subscription revenue is flattish in the context of what are clearly great subscription ARR and total ARR growth?

當我查看訂閱收入時，它似乎在 6900 萬美元至 7000 萬美元的範圍內持平。在此之前的多個季度中，就美元而言，它確實逐季回升。您能否幫助我理解為什麼在訂閱 ARR 和總 ARR 成長明顯良好的背景下，訂閱收入卻持平？

Yeah. Good question, Sanjit. The reality is our subscription revenue, it comes from a number of different bookings types. So our HCO product is an on-premise subscription. So it has a little bit different RevRec than your SaaS products. And so, we talk a lot about us putting our maintenance customers over to subscription. So there's some variability in the RevRec related to that particular product.

是的。好問題，桑吉特。現實是我們的訂閱收入，它來自許多不同的預訂類型。因此，我們的 HCO 產品是本地訂閱。因此，它的 RevRec 與您的 SaaS 產品略有不同。因此，我們經常談論我們將維護客戶轉為訂閱服務。因此，與特定產品相關的 RevRec 存在一些變化。

And so, what you're seeing there is Q1, for example, we have our biggest HCO customer, subscription customer, and it results in a big -- a little bit of a pop in Q1. So we have to overcome that in the second quarter. What we expect to see is some increase in subscription revenue in the back half of the year, and then we'll just continue to build on that momentum.

所以，你看到的是第一季度，例如，我們有我們最大的 HCO 客戶，訂閱客戶，這導致第一季出現了很大的成長。所以我們必須在第二季克服這個問題。我們預計下半年訂閱收入會增加，然後我們將繼續保持這一勢頭。

Yeah. Understood.

是的。明白了。

Yeah. Good question, Sanjit, too, as far as that's why we talk a lot more about subscription ARR because we think that's the better indicator of the health of the business.

是的。Sanjit，這個問題也問得好，這就是我們談論更多訂閱 ARR 的原因，因為我們認為這是衡量業務健康狀況的更好指標。

That concludes our Q&A session. I will now turn the conference back over to Mr. Sudhakar for closing remarks.

我們的問答環節到此結束。我現在將會議轉回由蘇達卡爾先生致閉幕詞。

Thank you again for joining us today, and thank you again for your support to SolarWinds. And appreciate all our customers, partners and shareholders.

再次感謝您今天加入我們，並再次感謝您對 SolarWinds 的支持。並感謝我們所有的客戶、合作夥伴和股東。

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.

女士們、先生們，今天的電話會議到此結束。感謝大家的加入。您現在可以斷開連線。