SolarWinds Corp (SWI)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 89.55% | 88.53% | 86.66% | 68.41% | 70.50% |
| Operating profit margin | 26.15% | 19.82% | -113.93% | -4.57% | 7.29% |
| Pretax margin | 13.03% | 4.50% | -126.23% | -11.67% | 2.55% |
| Net profit margin | 14.04% | -1.20% | -129.20% | -7.15% | 22.11% |
SolarWinds Corp's profitability ratios have exhibited fluctuations over the years. The Gross Profit Margin, a measure of how well the company generates revenue from its direct costs, has shown an increasing trend from 2020 to 2024, indicating improved efficiency in production and pricing strategies.
However, the Operating Profit Margin, which reflects the company's ability to generate profit from its core operations, witnessed significant variability during the period. While there were negative margins in 2021 and 2022, the margins rebounded positively in 2023 and 2024, indicating potential challenges in controlling operating expenses in the past.
Likewise, the Pretax Margin, representing the company's earnings before taxes, experienced drastic declines in 2021 and 2022, which could be attributed to adverse economic conditions or one-off expenses. The recovery in 2023 and 2024 suggests a potential improvement in operational performance and cost management.
Furthermore, the Net Profit Margin, indicating the proportion of revenue that translates into profit after all expenses have been deducted, displayed a negative margin in 2021 and 2022, signaling financial difficulties. The positive margins in 2020, 2023, and 2024 suggest a turnaround in profitability, possibly due to strategic adjustments or cost-cutting measures.
Overall, the analysis of SolarWinds Corp's profitability ratios highlights the company's journey through challenges to a potential path of recovery and improved profitability, emphasizing the importance of continuous monitoring and strategic decision-making in the financial performance of the organization.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.58% | 4.63% | -25.61% | -0.69% | 0.92% |
| Return on assets (ROA) | 3.53% | -0.28% | -29.04% | -1.07% | 2.78% |
| Return on total capital | 8.03% | 5.71% | -31.98% | -0.79% | 1.07% |
| Return on equity (ROE) | 7.99% | -0.63% | -67.86% | -2.25% | 5.26% |
SolarWinds Corp's profitability ratios exhibit fluctuations over the years. The Operating Return on Assets (Operating ROA) was 0.92% in 2020, turning negative in 2021 and 2022, only to rebound to 4.63% in 2023 and further improve to 6.58% in 2024. This indicates that the company generated a loss in its operations in 2021 and 2022, but managed to turn profitable again in later years.
The Return on Assets (ROA) follows a similar trend, with a positive ROA of 2.78% in 2020, dropping to negative values in 2021 and 2022, and then recovering to 3.53% in 2024. This metric reflects the company's ability to generate profits from its assets, which improved in the later years.
Return on Total Capital depicts a downward trend, declining from 1.07% in 2020 to -31.98% in 2022, before recovering to 8.03% in 2024. This indicates fluctuations in the company's ability to generate returns from its total capital employed over the years.
Return on Equity (ROE) also shows varied performance, with a positive ROE of 5.26% in 2020, turning negative in 2021 and 2022, and improving to 7.99% in 2024. ROE reflects the company's profitability from shareholders' equity, with SolarWinds experiencing lows in 2021 and 2022 before seeing an upturn in later years.
Overall, SolarWinds Corp's profitability ratios suggest a mix of challenges and improvements in profitability, with the company facing losses in certain years but managing to recover and show improved profitability in the later periods.