SolarWinds Corporation

Good day and thank you for standing by. Welcome to the SolarWinds first quarter 2021 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. If you require any further assistance, please press star 0. I would now like to hand the conference over to your speaker today, Howard Ma, Senior Director of Investor Relations. Please go ahead.

Thank you, Summer. Good morning, everyone, and welcome to SolarWinds' first quarter 2021 earnings call. With me today are Sudhakar Ramakrishna, our President and CEO, Mark Halsu, our EVP and Chief Financial Officer, and John Paliuga, EVP and President of Enable. Following prepared remarks, we'll have a brief question and answer session. This call is being simultaneously webcast on our investor relations website at investors.solarwinds.com. On our investor relations website, you can also find our earnings press release and a summary slide deck, which is intended to supplement our prepared remarks during today's call. Please remember that certain statements made during this call are forward-looking statements, including those concerning our financial outlook, the impact of the cyber incident on our business, our market opportunities, the impact of the global economic environment on our business, and the updates of the potential spinoff of our naval business. 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 also subject to a number of risks and uncertainties, including the numerous risks related to the cyber incident and the potential spinoff of our Enable business. Additional information concerning these statements and the risks and uncertainties associated with them is highlighted in today's earnings release and in our filings with the SEC. Copies are available from the SEC or on our investor relations website. Furthermore, 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 the non-GAAP financial measures. A reconciliation of the differences between GAAP and non-GAAP financial measures discussed on today's call are available in our earnings press release and summary slide deck on the investor relations page of our website. And with that, I will now turn the call over to Sudhakar.

Thank you, Mohit. Good morning, everyone, and thank you for joining us today. I hope you're doing well and staying safe. I want to start by first thanking our employees, customers, partners, and our shareholders for their ongoing commitment to and for their support of SolarWinds. I've completed my first full quarter at SolarWinds, and I'm energized and inspired as I witnessed firsthand the tremendous dedication that our employees have to customer success, the competence, commitment, and attitude displayed to execute on our Secure by Design initiatives and to deliver demonstrable results, the commitment and trust our customers and partners place in us, something we deeply cherish and do not take for granted as we accelerate our journey to help them transform faster in an increasingly hybrid IT world. I continue to spend a lot of my time with our employees, customers, and partners. Whereas the conversations earlier in the quarter were largely about the cyber incident itself and what happened, increasingly the conversations are much more focused on what have we learned and how can we apply what we have learned to ensure the safety of our environment and those of our customers. In this regard, our secure by design initiatives are enabling us to have broader conversations with customers, thereby bolstering our relevance to them even further. I'll expand on this in a minute. With respect to the cyber incident, we are also coming to the end of our investigation, and we continue to provide updates as we conclude them. I will now touch on a few financial and operational highlights in Q1. Our teams did an excellent job of maintaining focus on delivering customer success. Our partners played a pivotal role as we executed the Orion Assistance Program in support of our customers. For the first quarter, we delivered revenues well above the high end of the range of our outlook with a total non-GAAP revenue ending the quarter at $257 million, representing year-over-year growth of 33%. First quarter adjusted EBITDA was $106.5 million, representing an adjusted EBITDA margin of 41%, exceeding the high end of our outlook for the first quarter. Our Q1 Core IT Management maintenance renewal rate of 87% is higher than the low to mid-80% renewal rate we noted we expected in 2021 when we discussed our full year results in February. We continue to focus on customer retention as a key priority and hope to grow back to our historical and best-in-class renewal rates of over 90%. our largest customer renewed with us while also increasing their license count. We've also seen other customers, including those in the federal sector, expand their investments with SolarWinds in the first quarter. We see these wins as validation of our team's proactive and sustained efforts to deliver industry-leading solutions that are not only powerful and affordable, but also secure. Our enabled business again delivered double-digit, 13th-cent revenue growth in Q1, and we continue to expand our portfolio in support of our MSP partners and SME customers. Given the potential spinoff of this business, John Paliuca will provide a business update on this call. We are accelerating our momentum in the database monitoring segment with the formation of a dedicated core team to help us capture what we believe is a large and growing market opportunity of over $6 billion. We were recognized by Gartner in the magic quadrant for application performance monitoring, another pillar of future growth potential for us, alongside our database monitoring business. We expanded our offerings in Q1 as we continue to evolve to a full-stack observability company that helps accelerate the digital transformation needs of our customers via an integrated platform with automation, monitoring, alerting, and remediation capabilities, leveraging AI ML techniques on a unified cloud platform to support hybrid IT deployments. we expanded our management team with the appointment of Andrea Webb as our Chief Customer Officer, Tim Brown as our Chief Information and Security Officer, and Rohini Kasturi as our Chief Product Officer. Additionally, Jason Bliss assumed the role of Chief Administrative Officer, integrating the corporate functions of HR, corporate development, legal, and IT. In addition, we added key management members to the Enable business, including a chief technology and product officer, a general counsel, chief customer officer, and chief people officer, as Enable prepares to operate on a standalone basis. Now, let me turn to an update on our Secure by Design initiative. The recent cyber incident against SolarWinds, other widely used technology providers, and our and their customers is a concerning new reality for the software industry. This represents the increasingly novel and sophisticated action used by outside nation states on the supply chains and infrastructure on which we all rely and illustrates the need for the industry and public sector to work together to share real-time information. SolarWinds is committed to sharing our learnings about this attack broadly given the common development practices in the industry and our belief that transparency and cooperation are our industry's best tools to help prevent and protect against future attacks. And we see an opportunity to help the industry to help lead an industry-wide effort that we believe will position Perlevance as a model for a secure software environment, development processes, and products. In fact, this is increasingly the topic of discussion as I engage more closely with our customers and partners. Over the past three months, our IT, product, and development teams have been committed to implementing a series of actions that are designed to further enhance the security of our environment and systems against attacks, including adopting least privileged access mechanisms and addressing further potential risks associated with third-party application access. We also recognize that our security posture and procedures are dependent on the people at SolarWinds. So we are investing in additional rigorous security training for our employees. Our initiatives continue to resonate well with customers and partners, and it is my goal to proliferate them as broadly as possible. We see these initiatives and investments as being consistent with our goal of being a best-in-class provider of powerful, affordable, and secure solutions. Now let me turn the call over to John to provide an update on the Enable business. Done?