SolarWinds plans to invest between $ 20 million and $ 25 million in security initiatives this year following a massive cybernetad that has compromised many reputable customers.
A stocked IT infrastructure vendor said the money would be directed to security initiatives, as well as being used to cover higher insurance costs and professional fees resulting from violations, CFO Barton Kalsu said. SolarWinds admitted on Dec. 13 that nation-state hackers injected malicious code into their Orion network tracking product from March 2020 to June 2020.
“These [costs] they are not necessarily related to remediation as much as we see them as extensions and investments for us going forward, ”SolarWinds President and CEO Sudhakar Ramakrishna told investors on Thursday. “Our goal is to support the broader needs of IT, Dev[elopement] and SecOps [security operations] protection.”
[Related: Partners: AWS Must Come Clean On Role In SolarWinds Hack]
Since taking office as chief executive in early 2021, Ramakrishna said he has spent a lot of time with directors of information technology and civil society organizations of the federal government and private sector SolarWinds, highlighting findings from their cyberattack investigation as well as remediation steps. The vast majority of customers realized that an attack like this could happen to any widely deployed supplier, he said.
“Some customers have taken a‘ wait and see ’attitude, but at the moment there is no need to focus on outflow or replacement,” Ramakrishna said. “The vast majority of customers I’ve talked to and continue to work with have not only upgraded. In fact, many of them have also renewed their contracts. ”
SolarWinds gets a lot of questions about cybernetics from customers when they are for renovation, Kalsu said. Those who use the standby approach and do not turn off SolarWinds or do not renew their maintenance contracts, according to Kalsu.
Kalsu said it had a slight impact on SolarWinds ’SME business in January, as some SME partners and their end customers assessed the potential impact of cybernetics. But after SolarWinds was able to convince SMEs that none of the SME products were affected by the breach, Kalsu said the company was starting to see its SME business in shape.
“We could not find anything [in the attack] it was idiosyncratic for the SolarWinds environment, ”Ramakrishna said. “And if anything, our safety hygiene, safety position and safety tools are in line with what is practiced in the industry.”
Revenue for the quarter ended Dec. 31 climbed to $ 265.3 million, up 7.2 percent from the $ 247.5 million a year earlier. That beat Seeking Alpha’s $ 259.5 million estimate.
Net income rose sharply to $ 132.7 million, or $ 0.42 per diluted share, up 904 percent from $ 13.2 million, or $ 0.04 per diluted share, a year earlier. Based on non-GAAP, net income jumped to $ 82.1 million, or $ 0.26 per diluted share, up 8 percent from $ 76 million, or $ 0.24 per share, a year earlier. . That set aside Alphafina’s non-GAAP earnings estimate of $ 0.25 per share.
Shares of SolarWinds in morning trading fell $ 0.04 (0.25 percent) to $ 15.68 per share. Earnings were announced before the market opened on Wednesday.
Year-over-year sales climbed to $ 1.02 billion, up 9.3 percent from $ 932.5 million in 2019. And net income rose to $ 158.5 million, or $ 0.50 per diluted share , which is 750 percent more than $ 18.6 million or $ 0.06 per diluted share, the year before.
For the quarter ending March 31, SolarWinds expects to record earnings diluted by non-GAAP or $ 0.19 to $ 0.20 per share on total non-GAAP earnings of $ 247 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.