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This statistic highlights SolarWinds Corp’s Revenue by Segment, split across Maintenance, Subscription, and License, reported on a quarterly basis from Q3 2017 onwards.
|Segment||Q3 2020||Q2 2021||Q3 2021||Contribution in Q3 2021|
(All figures are in millions, except percentages.)
SolarWinds Corp. generated $181.27 million in Q3 2021, which was a decline of 30.5% as compared to $260.98 million in Q3 2020, on a year-on-year basis, primarily due to a 68% decrease in subscription revenue. Total revenue also decreased by 30.8% as compared to $261.97 million earned in Q2 2021, on a quarterly basis.
SolarWinds Corp’s revenue can be bifurcated into the following segments:
The company derives maintenance revenue from the sale of maintenance services associated with perpetual license products. Perpetual license customers pay for maintenance services on the basis of products they have bought. The maintenance revenue enhances when the company renews existing maintenance agreements and adds new perpetual license customers, and when it adds new products for existing customers. In addition, it typically increases prices annually for maintenance services.
Revenue generated from the Maintenance segment witnessed a decrease from $121.13 million in Q3 2020 to $119.74 million in Q3 2021. This indicates a decline of 1.2% on a yearly basis. It also decreased from $122.87 million in Q2 2021 to $119.74 million in Q3 2021, marking a downfall of 2.5% on a quarterly basis. The Maintenance segment contributes 66% to the company’s total revenue for Q3 2021.
The company primarily derives subscription revenue from fees received for subscriptions to SaaS offerings and to a lesser extent, time-based license arrangements. Subscription revenue includes sales of the cloud infrastructure, database, network management, application performance management and IT service management, or ITSM products. The subscription revenue rises as customers add new subscription products, enhance the capacity level of their existing subscription products, or increase the usage of their subscription products. In April 2020, the company launched subscription pricing options for certain network, systems, and database management products that have historically been sold as perpetual licenses. The on-premise subscription option gives customers additional flexibility when purchasing products.
The subscription segment saw a huge decline from $100.56 million in Q3 2020 to $32.29 million in Q3 2021, accounting for a fall of 67.9% on a year-on-year basis. Furthermore, it decreased from $112.43 million in Q2 2021 to $32.29 million in Q3 2021, indicating a decline of 71.1% on a quarterly basis. The subscription segment comprises only 18% of the company’s total revenue in Q3 2021.
License revenue is derived from the sale of perpetual licenses of the on-premise network, systems, storage and database management products to new and existing customers. The company includes one year of maintenance services as part of customers’ initial license purchase.
The License segment generated $29.24 million in Q3 2021, which was a decline of 25.5% as compared to $39.28 million in Q3 2020, on a yearly basis. However, it witnessed a slight growth of 9.5% on a quarterly basis, as compared to $26.68 million in Q2 2021. The license segment comprises 16% of the total revenue in Q3 2021.
A US-based software company, SolarWinds, was founded in 1999 and is headquartered in Austin, Texas, U.S. It is a leading provider of simple, powerful and secure information technology, or IT, management software. Their solutions give organizations globally, irrespective of type, size, or complexity, the power to grow business transformation in today’s hybrid IT environments. They combine customer-driven products with an “inside-first” sales model to grow the business while also generating significant cash flow. On July 19, 2021, the company completed the previously announced separation and distribution of its managed service provider business into a newly created and separately traded public company, N-able Inc.
SolarWinds Model is designed to reach all sizes of businesses. The customers represent organizations ranging in size from very small businesses to large enterprises. Customers often initially purchase one of the products to solve a known problem and then expand their purchases over time. As of December 31, 2021, the company had over 300,000 customers after giving effect to the Separation. SolarWinds offers a broad portfolio of products to monitor and manage network, systems, desktop, application, storage, database, website infrastructures, and IT service desks. The company intends to continue to innovate and invest in areas of product development that bring new products to market and enhance the functionality, ease of use and integration of the current products.
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