I recommended a hold rating for N-able (NYSE: NABL ) when I wrote about it last November, as I expected the uncertain near-term performance to weigh on the stock, despite my positive medium-term outlook. Based on my current outlook andI consider an investment ideal if it performs its core business in a sector projected to experience structural (organic) growth in excess of GDP growth over the next 5-10 years; profits from sustainable competitive advantages that translate into attractive unit economics; In t ...

Financial Performance - Revenue for the year ended December 31, 2024, was $466.1 million, representing a 10.5% increase from $421.9 million in 2023 and a 13.5% increase from $371.8 million in 2022[25]. - Net income for the year ended December 31, 2024, was $31.0 million, up from $23.4 million in 2023 and $16.7 million in 2022[25]. - Adjusted EBITDA for the year ended December 31, 2024, was $169.4 million, compared to $143.4 million in 2023 and $114.7 million in 2022[25]. - The company generated revenue of $466.1 million, $421.9 million, and $371.8 million for the years ended December 31, 2024, 2023, and 2022, respectively, indicating a growth trend[140]. - Revenue from customers outside of the United States represented 51.8% of total revenue for the fiscal year ended December 31, 2024[148]. Market Opportunity and Growth - The global market opportunity for the company's solutions is estimated at $44 billion in 2025, growing at approximately 14% to about $65 billion by 2028[36]. - IT spending by businesses with fewer than 2,500 employees is projected to increase from $1.9 trillion in 2024 to $2.6 trillion by 2028[26]. - The company supports over 500,000 businesses worldwide with its cloud-based software solutions[35]. - The company achieved a dollar-based net revenue retention rate of 103%, 110%, and 103% for the trailing twelve-month periods ended December 31, 2024, 2023, and 2022, respectively, indicating strong customer loyalty and expansion[44]. - The company is focused on expanding its IT services provider footprint by adding new customers that can grow their businesses alongside the company[44]. Product and Service Offerings - The platform offers over 100 out-of-the-box automated tasks to enhance service efficacy and capacity for IT service providers[41]. - The platform includes integrated solutions for unified endpoint management, data protection as-a-service, and security, addressing a wide range of IT service provider needs[45]. - The platform supports thousands of device types across major categories, including Windows, macOS, and Linux, enabling comprehensive management of IT environments[49]. - The platform's automation capabilities enable customers to scale their operations with fewer technical support personnel, enhancing operational efficiency[44]. - The platform is built on a multi-tier, multi-tenant architecture, enabling centralized control over distributed IT environments[39]. Customer and Employee Metrics - As of December 31, 2024, the company had 2,349 customers with Annual Recurring Revenue (ARR) over $50,000, representing a 7.0% increase from 2,196 customers as of December 31, 2023[70]. - Customers with ARR over $50,000 accounted for approximately 57% of the company's total ARR as of December 31, 2024, up from 56% the previous year[70]. - The company employs 1,773 individuals globally, with 447 in the United States and 1,326 outside the U.S., including 131 employees from the acquisition of Adlumin, Inc.[90]. - Approximately 75% of the company's employees were located outside of the United States as of December 31, 2024[148]. Strategic Initiatives - The company employs a differentiated go-to-market approach that allows it to grow alongside its customers as they expand their services and customer bases[42]. - The company has established strategic technology partnerships to enhance its platform's extensibility and provide integrated solutions to customers[64][65]. - The company plans to continue investing in research and development, particularly in international markets, to enhance its platform's functionalities[147]. - The company has made several acquisitions, including the acquisition of Adlumin, Inc. in November 2024, as part of its growth strategy[142]. - The company may pursue additional acquisitions to expand its market presence, but identifying suitable candidates and securing financing could pose challenges[145]. Risks and Challenges - The company faces significant competition in the IT services market, with competitors having advantages such as greater brand awareness and larger sales budgets[131]. - The company may face adverse effects from economic conditions, including inflation and potential recession, impacting customer spending on IT services[182]. - The company acknowledges that its financial outlook is speculative and subject to significant uncertainties, which may lead to material variations from actual results[190]. - The company has experienced a tightening labor market, which could lead to increased costs and negatively affect operational efficiency[179]. - The company may face significant expenses and resource allocation issues related to monitoring and protecting its intellectual property rights[209]. Cybersecurity and Compliance - The company has invested heavily in security, adhering to compliance standards such as HIPAA, ISO/IEC 27001, and PCI DSS, ensuring robust protection for its solutions[61]. - The company has experienced increased cybersecurity threats, including sophisticated supply-chain attacks, which may impact its ability to protect its systems and data[215]. - Cybersecurity incidents have resulted in compromises of proprietary information and could materially harm the business, leading to significant financial and reputational damage[212]. - The Cyber Incident has adversely affected SolarWinds' business, reputation, customer relations, and financial condition[218]. - Significant costs related to the Cyber Incident include investigations, remediation efforts, and ongoing cybersecurity initiatives, which may negatively impact financial condition[220]. Corporate Culture and Employee Engagement - N-able achieved Great Place to Work certification and received multiple awards, including three Stevie Awards for diversity and employee engagement[101]. - The company provides resources for employee wellness, including comprehensive benefits and specialized wellness programming[99]. - N-able's learning and development program supports career growth through various training and development initiatives[100]. - The company has a strong focus on diversity, equity, and belonging, with employee-driven Communities of Interest supporting various groups[95]. - The company is focused on maintaining its corporate culture as it expands, which is vital for recruiting and retaining talent[180].

Financial Data and Key Metrics Changes - Fourth quarter revenue grew 7% year-over-year in constant currency, with full year 2024 revenue growing 10% at constant currency [8][39] - Adjusted EBITDA for the fourth quarter was $38.1 million, reflecting a 32.7% margin, while full year adjusted EBITDA was $169.4 million, reflecting a 36.3% margin [9][43] - Annual recurring revenue (ARR) as of December 31, 2024, was $482 million, growing 10% at constant currency [8][42] Business Line Data and Key Metrics Changes - Cove Data Protection remains the largest revenue-generating product, protecting over 180,000 businesses and outpacing total company growth [17][30] - The acquisition of Adlumin has positioned it as one of the two highest booking products since its acquisition [15][16] Market Data and Key Metrics Changes - Approximately 45% of revenue was generated outside of North America in the fourth quarter, and 46% for the full year [46] - The company is focusing on expanding its presence in the North American reseller channel and international markets such as the U.K., DACH, and Australia [33][34] Company Strategy and Development Direction - The company aims to expand its security leadership, scale its go-to-market strategy, and elevate customer experience as part of its 2025 strategy [22][34] - The acquisition of Adlumin is expected to create multi-dimensional value by unifying security, endpoint management, and data protection [12][38] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position for growth in 2025, driven by strong demand in cybersecurity and digital transformation [58][60] - The company anticipates some headwinds in the first half of 2025 due to long-term contract commitments but expects acceleration in the second half [108][109] Other Important Information - The company transitioned from less than 10% of revenue from annual contracts to over 50% in 2024, which is expected to improve customer retention [19][20] - The company is investing in new development sites and anticipates a low point in adjusted EBITDA margins in Q1 2025 due to integration costs from the Adlumin acquisition [53][54] Q&A Session Summary Question: What was the revenue contribution from Adlumin in Q4? - The revenue contribution from Adlumin in Q4 was approximately $2.5 million from the acquisition date of November 20 through the end of the year [65] Question: What is the expected growth in annual contracts? - The initiative to move customers to annual contracts will continue, with expectations for a natural blend up over time, but not a significant uptick like in 2024 [68] Question: How has engagement been with Adlumin's reseller and partnership arrangements? - Engagement with resellers has been enthusiastic, as they now have a partner that offers a comprehensive portfolio, allowing for scaling in 2025 [75] Question: What competitive landscape does Adlumin face? - Adlumin competes with various players but differentiates itself through its cloud-native, endpoint-agnostic capabilities and the ability to separate software from service [80][82] Question: What is the expected organic growth rate for 2025? - The company expects organic growth to be impacted by long-term contract commitments in the first half of the year, with expectations for improvement in the second half [108][116]

Investor Presentation March 2025 © 2025 N-able Solutions ULC and N-able Technologies Ltd. All rights reserved. 1 Disclaimers General This presentation and the accompanying oral presentation do not constitute an offer or invitation for the sale or purchase of securities and has been prepared solely for informational purposes. The information contained in this presentation (the "Presentation") has been prepared to assist financial analysts in making their own evaluation of N-able, Inc. in connection with publ ...

分组1 - N-able reported quarterly earnings of $0.10 per share, exceeding the Zacks Consensus Estimate of $0.08 per share, but down from $0.11 per share a year ago, representing an earnings surprise of 25% [1] - The company achieved revenues of $116.51 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 2.08% and increasing from $108.42 million year-over-year [2] - N-able has consistently surpassed consensus EPS and revenue estimates over the last four quarters [2] 分组2 - The stock has gained approximately 7.4% since the beginning of the year, outperforming the S&P 500's gain of 1.2% [3] - The current consensus EPS estimate for the upcoming quarter is $0.08 on revenues of $121.19 million, and for the current fiscal year, it is $0.40 on revenues of $526.92 million [7] - The Technology Services industry, to which N-able belongs, is currently ranked in the top 31% of over 250 Zacks industries, indicating a favorable outlook [8]

Revenue Growth - Total revenue for Q4 2024 was $116.5 million, representing 7.5% year-over-year growth[5] - Subscription revenue for Q4 2024 was $115.0 million, reflecting an 8.5% year-over-year growth[5] - Full-year 2024 total revenue reached $466.1 million, indicating a 10.5% year-over-year growth[5] - Full-year 2024 subscription revenue was $459.0 million, showing an 11.4% year-over-year growth[5] - Total ARR for Q4 2024 was $482.5 million, reflecting an 8.6% year-over-year growth[5] - N-able expects total ARR for 2025 to be in the range of $514.0 million to $522.0 million, representing 7% to 8% year-over-year growth[13] - Non-GAAP revenue for the three months ended December 31, 2024, was $116,509,000, an increase of 7.3% compared to $108,415,000 for the same period in 2023[31] - Non-GAAP subscription revenue for Q4 2024 was $115,050, reflecting an 8.5% growth from $106,067 in Q4 2023[41] - Total GAAP revenue for the twelve months ended December 31, 2024, was $466,147, an increase of 10.5% compared to $421,880 in 2023[41] Profitability Metrics - Adjusted EBITDA for Q4 2024 was $38.1 million, with an adjusted EBITDA margin of 32.7%[5] - Full-year 2025 adjusted EBITDA outlook is projected to be between $132.0 million and $138.0 million, representing approximately 27% to 28% of total revenue[13] - Adjusted EBITDA for Q4 2024 was $38,144, slightly down from $39,200 in Q4 2023, showing a decrease of 2.7%[39] - Non-GAAP operating income for the twelve months ended December 31, 2024, was $142,867, up from $119,600 in 2023, representing a 19.4% increase[39] - Non-GAAP net income for the twelve months ended December 31, 2024, was $89,570, up from $68,221 in 2023, reflecting a growth of 31.3%[37] - GAAP operating margin for Q4 2024 was 13.7%, down from 20.1% in Q4 2023[39] - Non-GAAP operating margin for the twelve months ended December 31, 2024, was 30.6%, compared to 28.3% in 2023, indicating an improvement[39] Cash Flow and Assets - As of December 31, 2024, total cash and cash equivalents were $85.2 million, while total debt was $333.1 million[7] - Total current assets decreased to $183,923,000 as of December 31, 2024, from $224,791,000 in 2023, representing a decline of 18.2%[29] - Cash and cash equivalents decreased to $85,196,000 as of December 31, 2024, from $153,048,000 in 2023, a decline of 44.7%[29] - Total net cash provided by operating activities for the twelve months ended December 31, 2024, was $79,437 thousand, down from $90,089 thousand in 2023, a decline of 11.8%[33] - The company reported a net cash decrease of $89,249 thousand in cash and cash equivalents for the three months ended December 31, 2024, compared to an increase of $25,615 thousand in the same period of 2023[33] Expenses and Liabilities - Total operating expenses for the twelve months ended December 31, 2024, were $303,098,000, compared to $283,353,000 in 2023, an increase of 6.9%[31] - Total liabilities increased to $579,559,000 as of December 31, 2024, compared to $451,431,000 in 2023, indicating a rise of 28.4%[29] - Cash paid for interest in the twelve months ended December 31, 2024, was $28,690 thousand, slightly up from $28,437 thousand in 2023[34] - Stock-based compensation expense for the twelve months ended December 31, 2024, was $45,351 thousand, compared to $43,570 thousand in 2023, indicating an increase of 4.1%[33] - Depreciation and amortization expenses for the twelve months ended December 31, 2024, were $25,725 thousand, up from $21,623 thousand in 2023, representing a growth of 19.0%[33] Acquisitions and Strategic Moves - The strategic acquisition of Adlumin enhances N-able's security capabilities by adding cloud-native XDR and MDR[4] - The company incurred $98,694 thousand in acquisitions during the twelve months ended December 31, 2024, with no cash acquired in the previous year[33] Foreign Exchange and Deferred Revenue - The company reported a loss on foreign currency exchange rates of $2,009 thousand for the three months ended December 31, 2024, compared to a gain of $1,779 thousand in the same period of 2023[33] - Deferred revenue increased to $3,903 thousand for the three months ended December 31, 2024, compared to $1,127 thousand in the same period of 2023, reflecting a growth of 246.0%[33] Net Income - Net income for the three months ended December 31, 2024, was $3,290,000, down from $9,351,000 in the same period of 2023, a decrease of 64.8%[31] - GAAP net income for Q4 2024 was $3,290, a decrease of 64.8% compared to $9,351 in Q4 2023[39]

I recommended a hold rating for N-able (NYSE: NABL ) when I wrote about it in August, as I expected the transitionary tailwinds to impact NABL’s valuation. Based on my current outlook and analysis, I continue to recommend aI consider an investment ideal if it performs its core business in a sector projected to experience structural (organic) growth in excess of GDP growth over the next 5-10 years; profits from sustainable competitive advantages that translate into attractive unit economics; In the hands of ...

Group 1 - N-able (NABL) has experienced a significant decline of 17.1% over the past four weeks, but it is now in oversold territory, indicating a potential trend reversal [1] - The Relative Strength Index (RSI) for NABL is currently at 21.21, suggesting that the heavy selling pressure may be exhausting itself [4] - There is strong consensus among Wall Street analysts that NABL will report better earnings than previously predicted, with a 5.7% increase in the consensus EPS estimate over the last 30 days [5] Group 2 - The upward trend in earnings estimate revisions typically leads to price appreciation in the near term, indicating a potential rebound for NABL [5] - NABL holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [5]

Financial Data and Key Metrics Changes - Total revenue for Q3 2024 was $116.4 million, reflecting an 8% year-over-year growth on a reported basis and 7% on a constant currency basis [8][37] - Adjusted EBITDA was $44.8 million, representing a 39% adjusted EBITDA margin, with a year-over-year increase of approximately 23% [41] - Subscription revenue reached $115 million, indicating a 9% year-over-year growth on a reported basis and 8% on a constant currency basis [37] - Gross margin for Q3 was 83.7%, down from 84.6% in the same period in 2023 [41] - Dollar-based net revenue retention was approximately 105%, or 104% on a constant currency basis [39] Business Line Data and Key Metrics Changes - Cove Data Protection emerged as the fastest-growing product solution and now represents the largest recurring revenue product group [11] - Demand for data protection solutions was highlighted as a significant growth driver, with businesses increasingly relying on protected data and functioning IT systems [10] - The security suite also saw steady demand, with offerings including EDR, endpoint antivirus, and managed detection and response services [12][13] Market Data and Key Metrics Changes - Approximately 47% of revenue was generated outside of North America during the quarter [42] - The managed service provider (MSP) market is projected to grow by at least 12% in 2024, indicating a favorable market environment for N-able [22] Company Strategy and Development Direction - The company is focused on empowering MSPs with leading security solutions as part of its fiscal year '24 transformative strategic pillars [16] - N-able aims to transform customer relationships by offering long-term contracts, with over 50% of monthly recurring revenue now under such contracts [17][18] - The company is investing in its Ecoverse initiative, which aims to create a next-generation open ecosystem IT management platform [25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the health of the MSP channel, with a majority planning to grow in the coming year [52][53] - The company anticipates that headwinds from pricing and estate optimization will persist through the first half of 2025 [80] - Management noted that the shift towards cloud offerings is a positive trend, as more customers are moving away from on-premise solutions [72][75] Other Important Information - The company implemented strategic refinements to enhance its go-to-market strategy, maintaining adjusted EBITDA margins of over 30% [31] - N-able achieved SOC2 audit certification, ensuring compliance for service providers in regulated environments [29] Q&A Session Summary Question: What is the macro perspective on smaller MSPs? - Management reported that the majority of MSPs are planning to grow, with increased demand for security and disaster recovery solutions [52][53] Question: How sustainable is the cost rationalization in sales and marketing? - Management indicated that G&A spend is sustainable, while sales and marketing costs may fluctuate as new products are introduced [54][55] Question: Can you clarify the updated guidance regarding long-term contracts? - The guidance reflects a higher mix of customers opting for hosted and SaaS offerings, impacting revenue recognition [60] Question: What is the current mix between on-prem and SaaS? - On-premise revenue constitutes about 15% of the overall business, which is expected to trend downward as more customers shift to SaaS [66] Question: Are the pricing and estate optimization headwinds expected to continue into 2025? - Management expects these headwinds to persist through the first half of 2025, with a gradual improvement anticipated thereafter [80]

Revenue Performance - Total revenue for the three months ended September 30, 2024, was $116.4 million, an increase from $107.6 million in the same period of 2023, representing a growth of 8.2%[79] - Total revenue increased by $8.9 million, or 8.3%, for the three months ended September 30, 2024, compared to the same period in 2023[90] - Total revenue increased by $36.2 million, or 11.5%, for the nine months ended September 30, 2024, compared to the same period in 2023[103] Subscription Revenue - Subscription revenue rose by $9.8 million, or 9.3%, for the three months ended September 30, 2024, with subscription revenue accounting for 98.8% of total revenue[91] - Subscription revenue rose by $37.9 million, or 12.4%, for the nine months ended September 30, 2024, driven by growth in data protection and security solutions[103] - Subscription revenue accounted for 98.8% of total revenue for the three months ended September 30, 2024, up from 97.8% in 2023[92] Income and Profitability - Operating income for the three months ended September 30, 2024, was $23.9 million, compared to $18.4 million for the same period in 2023, reflecting a growth of 29.9%[80] - Net income for the three months ended September 30, 2024, was $10.8 million, up from $6.0 million in the same period of 2023, indicating an increase of 80%[80] - Income before income taxes increased by $19.8 million, or 71.9%, for the nine months ended September 30, 2024, compared to the same period in 2023[111] Expenses - Total cost of revenue increased by $2.5 million, or 14.7%, primarily due to increased public cloud infrastructure and hosting fees[94] - Research and development expenses increased by $3.2 million, or 16.4%, driven by higher personnel costs and stock-based compensation[96] - Total operating expenses increased by $11.5 million, or 5.4%, for the nine months ended September 30, 2024, compared to the same period in 2023[106] Cash Flow and Liquidity - Cash flows from operations for the three months ended September 30, 2024, were $22.0 million, down from $27.5 million in the same period of 2023[81] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $53.5 million, down from $58.9 million in the same period of 2023[121] - Cash and cash equivalents totaled $174.4 million as of September 30, 2024, with international subsidiaries holding approximately $167.1 million[119] Retention and Customer Metrics - The number of MSP partners with annualized recurring revenue (ARR) over $50,000 increased by 6.6%, from 2,134 as of September 30, 2023, to 2,275 as of September 30, 2024[79] - Annual dollar-based net revenue retention rate for subscription products was approximately 105% for the trailing twelve-month period ended September 30, 2024, down from 108% in 2023[91] - The company had approximately 25,000 customers as of September 30, 2024[79] Tax and Interest - Income tax expense increased by $3.8 million, with an effective tax rate of 42.3% for the three months ended September 30, 2024[101] - Interest expense, net decreased by $0.3 million, or 3.4%, primarily due to lower interest rates and reduced outstanding borrowings[99] - Interest expense, net increased by $0.2 million, or 1.0%, primarily due to increased interest rates on borrowings under the Credit Agreement[109] Research and Development - Research and development expenses are expected to grow as the company continues to enhance security, monitoring, and authentication of its solutions[85] - Research and development expenses increased by $8.7 million, or 14.7%, primarily due to higher personnel costs and stock-based compensation[106] Operational Efficiency - Non-GAAP operating income for Q3 2024 was $37.5 million, compared to $30.5 million in Q3 2023, reflecting a 22.9% growth[115] - Non-GAAP operating margin for Q3 2024 was 32.2%, up from 28.4% in Q3 2023[115] - Operating expenses totaled $72.6 million, representing 62.4% of total revenue for the three months ended September 30, 2024, compared to 66.8% in 2023[95] Other Income and Expenses - Other income (expense), net increased by $2.7 million, or 636.4%, primarily due to changes in foreign currency exchange rates[100] - Other revenue decreased by $0.9 million, or 38.8%, primarily due to a decline in maintenance and professional services revenue[93] - Other income, net increased by $2.1 million, or 135.6%, primarily due to higher dividend income from money market fund financial assets[110] Financial Position - Total borrowings as of September 30, 2024, were $333.6 million, slightly down from $335.0 million as of December 31, 2023[119] - The company did not have any relationships with unconsolidated organizations or financial partnerships for off-balance sheet arrangements during the reporting period[119] - The company plans to utilize foreign earnings for investments in foreign operations or remit them to U.S. entities in a tax-efficient manner[119] Accounting Policies - The company’s financial statements are prepared in accordance with GAAP, requiring management to make estimates that affect reported amounts of assets, liabilities, revenue, costs, and expenses[128] - Critical accounting policies include the valuation of goodwill, intangibles, long-lived assets, revenue recognition, and income taxes[128] - There have been no material changes to critical accounting policies and estimates since the 2023 Annual Report[128]