swi-20240331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

(Mark One)


☑			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38711

SolarWinds Corporation

(Exact name of registrant as specified in its charter)


Delaware						81-0753267
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

7171 Southwest Parkway

Building 400

Austin, Texas 78735

(512) 682.9300

(Address and telephone number of principal executive offices)

Securities registered pursuant to Section 12(b) of the Act:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common Stock, $0.001 par value	SWI	New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. þ Yes ¨ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). þ Yes ¨ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☑
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes þ No

On April 30, 2024, 168,191,919 shares of common stock, par value $0.001 per share, were outstanding.

SOLARWINDS CORPORATION

Table of Contents


PART I - FINANCIAL INFORMATION
		Page
Item 1.	Financial Statements	5
	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	5
	Condensed Consolidated Statements of Operations for the three month periods ended March 31, 2024 and 2023	6
	Condensed Consolidated Statements of Comprehensive Income (Loss) for the three month periods ended March 31, 2024 and 2023	7
	Condensed Consolidated Statements of Stockholders' Equity for the three month periods ended March 31, 2024 and 2023	8
	Condensed Consolidated Statements of Cash Flows for the three month periods ended March 31, 2024 and 2023	9
	Notes to the Condensed Consolidated Financial Statements	11
	1. Organization and Nature of Operations
	2. Summary of Significant Accounting Policies
	3. Investments
	4. Goodwill
	5. Fair Value Measurements
	6. Debt
	7. Earnings (Loss ) Per Share
	8. Income Taxes
	9. Commitment and Contingencies

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures of Market Risk	34
Item 4.	Controls and Procedures	35
PART II - OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 6.	Exhibits	37
	Signatures	38

Safe Harbor Cautionary Statement

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. Such statements may be signified by terms such as “aim,” “anticipate,” “believe,” “continue,” “expect,” “feel,” “intend,” “estimate,” “seek,” “plan,” “may,” “can,” “could,” “should,” “will,” “would” or similar expressions and the negatives of those terms. In this report, forward-looking statements include statements regarding our financial projections, future financial performance and plans and objectives for future operations. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially and adversely different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the following:

•risks related to the Cyber Incident, including with respect to (1) litigation and investigation risks related to the Cyber Incident, including as a result of the pending civil complaint filed by the Securities and Exchange Commission against us and our Chief Information Security Officer, including that we may incur significant costs in defending ourselves and may be unsuccessful in doing so, resulting in exposure to potential penalties, judgements, fines, settlement-related costs and other costs and liabilities related thereto, (2) numerous financial, legal, reputational and other risks to us related to the Cyber Incident, including risks that the incident, SolarWinds’ response thereto or litigation related to the Cyber Incident may result in the loss of business as a result of termination or non-renewal of agreements, or reduced purchases or upgrades of our products, reputational damage adversely affecting customer, partner, and vendor relationships and investor confidence, increased attrition of personnel and distraction of key and other personnel, indemnity obligations, damages for contractual breach, penalties for violation of applicable laws or regulations, significant costs for remediation, and the incurrence of other liabilities and risks related to the impact of any such costs and liabilities, and (3) the possibility that our steps to secure our internal environment, improve our product development environment, and ensure the security and integrity of the software that we deliver to our customers may not be successful or sufficient to protect against future threat actors or attacks, or be perceived by existing and prospective customers as sufficient to address the harm caused by the Cyber Incident;

•other risks related to cyber security, including that we may experience other security incidents or have vulnerabilities in our systems and services exploited, whether through the actions or inactions of our employees, our customers, insider threats or otherwise, which may result in compromises or breaches of our and our customers’ systems or, theft or misappropriation of our and our customers’ confidential, proprietary or personal information, as well as exposure to legal and other liabilities, including the related risk of higher customer, employee and partner attrition and the loss of key personnel, as well as negative impacts to our sales, renewals and upgrades;

•risks related to the evolving breadth of our sales motion and challenges, investments and additional costs associated with increased selling efforts toward enterprise customers and adopting a subscription-first approach;

•risks relating to increased investments in, and the timing and success of, our transformation from monitoring to observability;

•risks related to any shifts in our revenue mix and the timing of how we recognize revenue as we transition to a subscription-first model;

•risks related to using artificial intelligence (AI) in our business and our solutions, including risks related to evolving regulation of AI, machine learning and the receipt, collection, storage, processing and transfer of data as well as the threat of cyberattacks created through AI or leveraging AI;

•potential foreign exchange gains and losses related to expenses and sales denominated in currencies other than the functional currency of an associated entity;

•any of the following factors either generally or as a result of the impacts of global macroeconomic conditions, including the wars in Israel and Ukraine, geopolitical tensions involving China, disruptions in the global supply chain and energy markets, inflation, uncertainty over liquidity concerns in the broader financial services industry, foreign currency exchange rates, and the effects of the global COVID pandemic or other public health crisis on the global economy, or on our business operations and financial condition, or on the business operations and financial conditions of our customers, their end-customers, and our prospective customers:

◦reductions in information technology spending or delays in purchasing decisions by our customers, their end-customers and our prospective customers;

◦the inability to sell products to new customers or to sell additional products or upgrades to our existing customers or to convert our maintenance customers to subscription products;

◦any decline in our renewal or net retention rates or any delay or loss of U.S. government sales;

◦the inability to generate significant volumes of high-quality sales leads from our digital marketing initiatives and convert such leads into new business at acceptable conversion rates;

◦the timing and adoption of new products, product upgrades or pricing model changes by us or our competitors;

◦changes in interest rates;

◦risks associated with our international operations and any international expansion efforts; and

◦ongoing sanctions and export controls;

•the possibility that our operating income could fluctuate and may decline as percentage of revenue as we make further expenditures to expand our infrastructure, product offerings and sales motion in order to support additional growth in our business;

•our ability to compete effectively in the markets we serve and the risks of increased competition as we enter new markets;

•our ability to attract, retain and motivate employees;

•any violation of legal and regulatory requirements or any misconduct by our employees or partners;

•risks associated with increased efforts and costs to comply with ongoing changes in applicable laws and regulations;

•our inability to successfully identify, complete and integrate acquisitions and manage our growth effectively;

•risks associated with our status as a controlled company; and

•such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission, including the risk factors discussed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this Quarterly Report on Form 10-Q. Except as required by law, we assume no obligation to update these forward-looking statements publicly, or to update the reasons actual results could differ materially and adversely from those anticipated in these forward-looking statements, even if new information becomes available in the future.

Investors and others should note that we announce material information to our investors using our investor relations website (https://investors.solarwinds.com), SEC filings, press releases, public conference calls and webcasts. We use these channels as well as social media to communicate with the public about our company, our business and other matters. It is possible that the information we post on social media could be deemed to be material information. Therefore, we encourage investors, the media, and others interested in our company to review the information we post on the social media channels listed on our investor relations website.

In this report “SolarWinds,” “Company,” “we,” “us” and “our” refer to SolarWinds Corporation and its consolidated subsidiaries.

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

SolarWinds Corporation

Condensed Consolidated Balance Sheets

(In thousands, except share and per share information)

(Unaudited)


	March 31,		December 31,
	2024		2023
Assets
Current assets:
Cash and cash equivalents	$	304,431	$	284,695
Short-term investments	8,382		4,477
Accounts receivable, net of allowances of $776 and $743 as of March 31, 2024 and December 31, 2023, respectively	102,752		103,455
Income tax receivable	603		459


Prepaid and other current assets	26,451		28,241
Total current assets	442,619		421,327
Property and equipment, net	18,641		19,669
Operating lease assets	39,848		43,776
Deferred taxes	133,288		133,224
Goodwill	2,384,077		2,397,545
Intangible assets, net	168,624		183,688
Other assets, net	51,567		51,686
Total assets	$	3,238,664	$	3,250,915
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	9,541	$	9,701
Accrued liabilities and other	40,516		56,643
Current operating lease liabilities	14,762		14,925

Accrued interest payable	1,182		942
Dividends payable	168,162		—
Income taxes payable	38,038		29,240
Current portion of deferred revenue	344,292		344,907
Current debt obligation	9,267		12,450
Total current liabilities	625,760		468,808
Long-term liabilities:
Deferred revenue, net of current portion	41,920		42,070
Non-current deferred taxes	1,904		1,933
Non-current operating lease liabilities	46,366		49,848
Other long-term liabilities	41,795		55,278
Long-term debt, net of current portion	1,195,800		1,190,934
Total liabilities	1,953,545		1,808,871
Commitments and contingencies (Note 9)

Stockholders’ equity:
Common stock, $0.001 par value: 1,000,000,000 shares authorized and 168,161,987 and 166,637,506 shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	168		167
Preferred stock, $0.001 par value: 50,000,000 shares authorized and no shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	—		—
Additional paid-in capital	2,532,169		2,688,854
Accumulated other comprehensive loss	(43,903)		(28,103)
Accumulated deficit	(1,203,315)		(1,218,874)
Total stockholders’ equity	1,285,119		1,442,044
Total liabilities and stockholders’ equity	$	3,238,664	$	3,250,915

The accompanying notes are an integral part of these condensed consolidated financial statements.

SolarWinds Corporation

Condensed Consolidated Statements of Operations

(In thousands, except per share information)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Revenue:
Subscription	$	68,757	$	54,357
Maintenance	111,720		114,478
Total recurring revenue	180,477		168,835
License	12,834		17,141
Total revenue	193,311		185,976
Cost of revenue:
Cost of recurring revenue	18,172		18,394
Amortization of acquired technologies	2,664		3,436
Total cost of revenue	20,836		21,830
Gross profit	172,475		164,146
Operating expenses:
Sales and marketing	54,921		65,916
Research and development	27,828		23,791
General and administrative	31,308		25,601
Amortization of acquired intangibles	11,519		13,005

Total operating expenses	125,576		128,313
Operating income	46,899		35,833
Other income (expense):
Interest expense, net	(26,830)		(28,581)
Other income (expense), net	51		(89)
Total other expense	(26,779)		(28,670)
Income before income taxes	20,120		7,163
Income tax expense	4,561		12,784
Net income (loss)	$	15,559	$	(5,621)
Net income (loss) available to common stockholders	$	15,559	$	(5,621)
Net income (loss) available to common stockholders per share:
Basic income (loss) per share	$	0.09	$	(0.03)
Diluted income (loss) per share	$	0.09	$	(0.03)
Weighted-average shares used to compute net income (loss) available to common stockholders per share:
Shares used in computation of basic income (loss) per share	167,419		162,773
Shares used in computation of diluted income (loss) per share	171,169		162,773

The accompanying notes are an integral part of these condensed consolidated financial statements.

SolarWinds Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss)

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Net income (loss)	$	15,559	$	(5,621)
Other comprehensive income (loss):
Foreign currency translation adjustment	(15,800)		10,383
Unrealized gains on investments, net of income tax expense of $— and $21 for the three months ended March 31, 2024 and 2023, respectively	—		83
Other comprehensive income (loss)	(15,800)		10,466
Comprehensive income (loss)	$	(241)	$	4,845

The accompanying notes are an integral part of these condensed consolidated financial statements.

SolarWinds Corporation

Condensed Consolidated Statements of Stockholders' Equity

(In thousands)

(Unaudited)


	Three Months Ended March 31, 2024
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount









Balance at December 31, 2023	166,638	$	167	$	2,688,854	$	(28,103)	$	(1,218,874)	$	1,442,044
Foreign currency translation adjustment	—	—		—		(15,800)		—		(15,800)

Net income	—	—		—		—		15,559		15,559
Comprehensive loss										(241)
Exercise of stock options	2	—		8		—		—		8
Restricted stock units issued, net of shares withheld for taxes	1,354	1		(8,290)		—		—		(8,289)

Issuance of stock under employee stock purchase plan	168	—		1,594		—		—		1,594

Special dividend declared ($1.00 per share)	—	—		(168,162)		—		—		(168,162)
Stock-based compensation	—	—		18,165		—		—		18,165
Balance at March 31, 2024	168,162	$	168	$	2,532,169	$	(43,903)	$	(1,203,315)	$	1,285,119


	Three Months Ended March 31, 2023
	Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2022	161,929	$	162	$	2,627,370	$	(48,114)	$	(1,209,765)	$	1,369,653
Foreign currency translation adjustment	—	—		—		10,383		—		10,383
Unrealized gain on investments, net of taxes	—	—		—		83		—		83
Net loss	—	—		—		—		(5,621)		(5,621)
Comprehensive income										4,845
Exercise of stock options	6	—		8		—		—		8
Restricted stock units issued, net of shares withheld for taxes	1,531	2		(6,993)		—		—		(6,991)
Issuance of stock	3	—		18		—		—		18
Issuance of stock under employee stock purchase plan	198	—		1,711		—		—		1,711
Stock-based compensation	—	—		16,556		—		—		16,556
Balance at March 31, 2023	163,667	$	164	$	2,638,670	$	(37,648)	$	(1,215,386)	$	1,385,800

The accompanying notes are an integral part of these condensed consolidated financial statements.

SolarWinds Corporation

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Three Months Ended March 31,
	2024		2023
Cash flows from operating activities
Net income (loss)	$	15,559	$	(5,621)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization	19,277		22,018

Provision for losses on accounts receivable	62		594
Stock-based compensation expense	17,881		16,234

Amortization of debt issuance costs	2,657		2,666


Deferred taxes	(3,043)		1,906


(Gain) loss on foreign currency exchange rates	(230)		184
Lease impairment charges	1,381		5,754
Other non-cash expenses (benefit)	(36)		166
Changes in operating assets and liabilities:
Accounts receivable	(327)		(7,930)
Income taxes receivable	(155)		(312)
Prepaid and other assets	2,315		(6,339)
Accounts payable	(139)		(5,205)
Accrued liabilities and other	(16,823)		(33,587)
Accrued interest payable	240		(273)
Income taxes payable	(4,690)		3,485
Deferred revenue	2,345		7,059

Net cash provided by operating activities	36,274		799
Cash flows from investing activities
Purchases of investments	(8,311)		—
Maturities of investments	4,500		15,035
Purchases of property and equipment	(1,411)		(342)
Capitalized software development costs	(3,310)		(3,087)
Purchases of intangible assets	(54)		(51)


Other investing activities	—		564
Net cash provided by (used in) investing activities	(8,586)		12,119
Cash flows from financing activities


Proceeds from issuance of common stock under employee stock purchase plan	1,594		1,711
Repurchase of common stock	(8,289)		(6,991)
Exercise of stock options	8		8





Payment of debt issuance costs	(1,036)		—


Net cash used in financing activities	(7,723)		(5,272)
Effect of exchange rate changes on cash and cash equivalents	(229)		(204)






Net increase in cash and cash equivalents	19,736		7,442
Cash and cash equivalents
Beginning of period	284,695		121,738
End of period	$	304,431	$	129,180


	Three Months Ended March 31,
	2024		2023
Supplemental disclosure of cash flow information
Cash paid for interest	$	27,083	$	26,740
Cash paid for income taxes	$	11,144	$	6,566

Non-cash investing and financing transactions

Stock-based compensation included in capitalized software development costs	$	284	$	322
Dividends declared but not paid	$	168,162	$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

SolarWinds Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Organization and Nature of Operations

SolarWinds Corporation, a Delaware corporation, and its subsidiaries (“Company,” “we,” “us” and “our”) is a leading provider of simple, powerful and secure observability and information technology, or IT, management software. Our solutions are designed to give organizations worldwide, regardless of type, size or complexity, with a comprehensive and unified view of today’s modern, distributed and hybrid network environments. Our business is focused on building products to enable technology professionals and leaders to securely monitor and manage the performance of their IT environments, whether they be on-premises, in the cloud or in hybrid deployments. Our approach has enabled us to serve the entire IT market and our customers include network and systems engineers, database administrators, storage administrators, DevOps, SecOps and service desk professionals. We sell our products for use in organizations across industries ranging in size from very small businesses to large enterprises.

2. Summary of Significant Accounting Policies

We prepared our interim condensed consolidated financial statements in conformity with United States of America generally accepted accounting principles ("GAAP"), and the reporting regulations of the Securities and Exchange Commission (the "SEC"). They do not include all of the information and footnotes required by GAAP for complete financial statements. The accompanying condensed consolidated financial statements include the accounts of SolarWinds Corporation and the accounts of its wholly owned subsidiaries. We have eliminated all intercompany balances and transactions.

The interim financial information is unaudited, but reflects all normal adjustments that are, in our opinion, necessary to provide a fair statement of results for the interim periods presented. This interim information should be read in conjunction with the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2023.

Special Cash Dividend

On March 15, 2024, our Board of Directors declared a special cash dividend of $1.00 per share of common stock issued and outstanding as of April 3, 2024. The dividend payable of $168.2 million is recorded on our condensed consolidated balance sheet as of March 31, 2024 and was paid on April 15, 2024.

Reclassifications

Certain reclassifications have been made to the prior period condensed consolidated statements of cash flows to conform to the current period presentation. These reclassifications did not impact previously reported net income (loss), total assets or net operating, investing or financing cash flows.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires our management to make estimates and assumptions that affect the reported amounts and the disclosure of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. The actual results that we experience may differ materially from our estimates. The accounting estimates that require our most significant, difficult and subjective judgments include:

•the valuation of goodwill, intangibles, long-lived assets and contingent consideration;

•revenue recognition;

•stock-based compensation;

•income taxes; and

•loss contingencies.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued Accounting Standards Update ("ASU") No. 2023-07 "Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures." The updated guidance expands segment disclosures by requiring additional disclosure of significant segment expenses included within segment profit or loss along with other segment information. The updated guidance is effective for public companies for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024, and early adoption is permitted. We currently operate as a single reportable segment and while we do not expect the adoption of this

SolarWinds Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

guidance to have a material impact on our consolidated financial statements, we will be required to provide enhanced segment disclosures beginning in our Annual Report for the fiscal year ended December 31, 2024 and subsequent interim periods.

In December 2023, the FASB issued ASU No. 2023-09 "Income Taxes (Topic 740): Improvements to Income Tax Disclosures" to expand the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. The updated guidance is effective for public companies for fiscal years beginning after December 15, 2024 and early adoption permitted. We currently do not expect that the adoption of this guidance will have a material impact on our consolidated financial statements.

Fair Value Measurements

We apply the authoritative guidance on fair value measurements for financial assets and liabilities that are measured at fair value on a recurring basis and non-financial assets and liabilities, such as goodwill, intangible assets and property, plant and equipment that are measured at fair value on a non-recurring basis.

The guidance establishes a three-tiered fair value hierarchy that prioritizes inputs to valuation techniques used in fair value calculations. The three levels of inputs are defined as follows:

Level 1: Unadjusted quoted prices for identical assets or liabilities in active markets accessible by us.

Level 2: Inputs that are observable in the marketplace other than those inputs classified as Level 1.

Level 3: Inputs that are unobservable in the marketplace and significant to the valuation.

We determine the fair value of our available-for-sale securities based on inputs obtained from multiple pricing vendors, who may use quoted prices in active markets for identical assets (Level 1 inputs) or inputs other than quoted prices that are observable either directly or indirectly (Level 2 inputs) in determining fair value. However, we classify all of our available-for-sale securities as being valued using Level 2 inputs. The valuation techniques used to determine the fair value of our financial instruments having Level 2 inputs are derived from unadjusted, non-binding market consensus prices that are corroborated by observable market data, quoted market prices for similar instruments, or pricing models. Our procedures include controls to ensure that appropriate fair values are recorded by a review of the valuation methods and assumptions.

See Note 5. Fair Value Measurements for a summary of our financial instruments accounted for at fair value on a recurring basis. The carrying amounts reported in our condensed consolidated balance sheets for cash, accounts receivable, accounts payable and other accrued expenses approximate fair value due to relatively short periods to maturity.

Accumulated Other Comprehensive Income (Loss)

Changes in accumulated other comprehensive income (loss) by component are summarized below:


	Foreign Currency Translation Adjustments		Accumulated Other Comprehensive Income (Loss)

	(in thousands)




Balance at December 31, 2023	$	(28,103)	$	(28,103)
Other comprehensive loss before reclassification	(15,800)		(15,800)
Amount reclassified from accumulated other comprehensive income (loss)	—		—
Net current period other comprehensive loss	(15,800)		(15,800)
Balance at March 31, 2024	$	(43,903)	$	(43,903)

SolarWinds Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

Disaggregation of Revenue

The following summarizes the revenue we recognized at a point in time and over time:


	Three Months Ended March 31,
	2024		2023

	(in thousands)
Revenue recognized at a point in time	$	43,629	$	37,991
Revenue recognized over time	149,682		147,985
Total revenue recognized	$	193,311	$	185,976

Deferred Revenue

Details of our total deferred revenue balance are as follows:


	Total Deferred Revenue

	(in thousands)
Balance at December 31, 2023	$	386,977

Deferred revenue recognized	(132,594)
Additional amounts deferred	131,829

Balance at March 31, 2024	$	386,212

We expect to recognize revenue related to these remaining performance obligations as of March 31, 2024 as follows:


	Revenue Recognition Expected by Period
	Total		Less than 1 year		1-3 years		More than 3 years

	(in thousands)
Expected recognition of deferred revenue	$	386,212	$	344,292	$	40,946	$	974

Deferred Commissions

Details of our deferred commissions balance are as follows:


			Deferred Commissions
			(in thousands)
Balance at December 31, 2023			$	23,563

Commissions capitalized			2,169
Amortization recognized			(2,284)
Balance at March 31, 2024			$	23,448

	March 31,		December 31,
	2024		2023

	(in thousands)
Classified as:
Current	$	8,024	$	7,926
Non-current	15,424		15,637
Total deferred commissions	$	23,448	$	23,563

SolarWinds Corporation

Notes to Condensed Consolidated Financial Statements (Unaudited)

Cost of Revenue

Amortization of Acquired Technologies. Amortization of acquired technologies included in cost of revenue relate to our licensed products and subscription offerings as follows:


	Three Months Ended March 31,
	2024		2023

	(in thousands)
Amortization of acquired license technologies	$	923	$	922
Amortization of acquired subscription technologies	1,741		2,514
Total amortization of acquired technologies	$	2,664

SEC Form 10-Q filed by SolarWinds Corporation