Share N-able supports customers in the defense supply chain with a scalable UEM solution designed for compliance and business resilience BURLINGTON, Mass.--(BUSINESS WIRE)--N-able, Inc. (NYSE: NABL), a global software company delivering an end-to-end cyber resilience platform, today announced the public preview of a version of its N- able N-central unified endpoint management (UEM) solution supporting CMMC 2.0 controls—which customers can run to control their own data and infrastructure in their secure envi ...

Revenue Growth - Total revenue for the three months ended September 30, 2025, was $131.7 million, an increase of $15.3 million or 13.1% compared to $116.4 million for the same period in 2024[128][146]. - Annual recurring revenue (ARR) as of September 30, 2025, was $528.1 million, representing a 14.2% increase from $462.4 million as of September 30, 2024[130]. - Subscription revenue for the three months ended September 30, 2025, was $130.5 million, a 13.5% increase from $115.0 million in the same period in 2024[146][147]. - Total revenue increased by $31.5 million, or 9.0%, for the nine months ended September 30, 2025, compared to the same period in 2024[162]. - Subscription revenue increased by $33.3 million, or 9.7%, for the nine months ended September 30, 2025, representing 99.0% of total revenue[163]. Customer Metrics - The number of customers with ARR over $50,000 increased by 14.8% to 2,611 as of September 30, 2025, up from 2,275 as of September 30, 2024[131]. - The annual dollar-based net revenue retention rate for subscription products was approximately 102% for the trailing twelve-month period ended September 30, 2025, down from 105% for the same period in 2024[148][164]. Operating Income and Expenses - Operating income for the three months ended September 30, 2025, was $11.6 million, down from $23.9 million for the same period in 2024[133]. - Operating expenses rose by $17.8 million, or 24.5%, for the three months ended September 30, 2025, compared to the same period in 2024, driven by increases in sales and marketing, research and development, and general and administrative expenses[152]. - Total operating expenses for the nine months ended September 30, 2025, increased by $45.7 million, or 20.2%, to $271.6 million, representing 71.3% of revenue compared to 64.6% in 2024[167]. Net Income and Tax - Net income for the three months ended September 30, 2025, was $1.4 million, a decrease from $10.8 million for the same period in 2024, primarily due to increased expenses[133]. - The effective tax rate increased to 82.2% for the three months ended September 30, 2025, primarily due to an increase in unbenefited losses in the United States[159]. - Income tax expense decreased by $4.8 million, with an effective tax rate of 293.0% for the nine months ended September 30, 2025, primarily due to an increase in unbenefited losses in the U.S.[174]. Cash Flow and Investments - Cash flows from operations for the three months ended September 30, 2025, were $24.0 million, compared to $22.0 million for the same period in 2024[134]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $67.9 million, an increase from $53.5 million in 2024[195]. - Net cash used in investing activities increased to $22.0 million for the nine months ended September 30, 2025, compared to $15.6 million in 2024, primarily due to increased capitalized research and development costs[199]. - The company repurchased $10.0 million of common stock during the three months ended September 30, 2025, and $20.0 million during the nine months ended September 30, 2025, under its share repurchase program[192]. Acquisitions and Future Plans - The company completed the acquisition of Adlumin on November 20, 2024, contributing to revenue growth and customer expansion[130]. - The company expects to continue growing its sales and marketing organization to drive new customer additions and retain existing customers[139]. - Research and development expenses are anticipated to increase as the company brings new product offerings to market and enhances security features[140]. - The company has not entered into any material definitive agreements regarding potential investments or acquisitions but may consider such arrangements in the future[193].

Financial Data and Key Metrics Changes - Total ARR for the third quarter was $528.1 million, reflecting a 14% year-over-year growth on a reported basis and 13% on a constant currency basis [29] - Total revenue reached $131.7 million, exceeding guidance by $3.7 million, representing approximately 13% year-over-year growth on a reported basis and 12% on a constant currency basis [29] - Adjusted EBITDA margin was approximately 31.4%, with adjusted EBITDA of $41.4 million, which was $4.4 million above the high end of guidance [30] - Dollar-based net revenue retention was approximately 102% on a reported basis, indicating improvement year-over-year and quarter-over-quarter [30][25] Business Line Data and Key Metrics Changes - The data protection solution led net new ARR growth in the quarter, showcasing strong demand for security operations and unified endpoint management (UEM) [20][25] - The company launched anomaly detection as a service, enhancing its data protection capabilities and shifting focus from reactive defense to proactive resilience [19] Market Data and Key Metrics Changes - Approximately 45% of revenue was generated outside of North America, indicating a diversified market presence [31] - The company reported a significant increase in detected threats against small and mid-market businesses, highlighting the growing need for cybersecurity solutions [8] Company Strategy and Development Direction - The company is focused on driving security success, scaling its go-to-market strategy, and boosting customer expansion, with a channel-first model proving effective [19][21] - N-able is embedding AI capabilities across its platform to enhance cybersecurity solutions, positioning itself as a leader in the evolving cybersecurity landscape [10][17] - The company aims to democratize security by providing advanced AI SOC capabilities at a fraction of the cost, targeting small and mid-market businesses [15] Management's Comments on Operating Environment and Future Outlook - Management emphasized the critical role of AI in driving demand for cybersecurity solutions and the importance of embedding AI into their platform [10][26] - The outlook for the fourth quarter includes expected total revenue in the range of $126.5-$127.5 million, representing approximately 9% year-over-year growth [33] - The company raised its full-year ARR outlook to $530-$531 million, reflecting a commitment to balancing profitability with growth [34] Other Important Information - The company executed a share repurchase program, demonstrating confidence in its long-term value [26] - N-able's recent initiatives, such as sponsoring CATNIP, aim to standardize AI language across organizations, enhancing automation and efficiency [11] Q&A Session Summary Question: What are the keys behind the building momentum in ARR revenue? - Management attributed the acceleration to successful execution around the Adlumen acquisition and broadening channel presence [39][46] Question: How confident is management that net revenue retention has bottomed? - Management expressed high confidence that net revenue retention bottomed in the first quarter and has been improving due to successful cross-selling and gross retention efforts [49][50] Question: How is the Adlumen acquisition performing relative to initial expectations? - Management indicated that the acquisition thesis is holding true, with strong demand and successful scaling within the MSP community [70][71] Question: What is the company's approach to investing in AI? - Management confirmed ongoing investments in AI, viewing it as a significant opportunity for both short-term and mid-term growth, while maintaining a focus on achieving 30% EBITDA margins [76][80]

Core Insights - N-able (NABL) reported quarterly earnings of $0.13 per share, exceeding the Zacks Consensus Estimate of $0.09 per share, with an earnings surprise of +44.44% [1] - The company achieved revenues of $131.71 million for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 3.30% and showing a year-over-year increase from $116.44 million [2] - N-able has consistently outperformed consensus EPS and revenue estimates over the last four quarters [2] Financial Performance - The earnings report indicates that N-able's earnings have remained stable year-over-year, with the same earnings per share of $0.13 compared to the previous year [1] - The company has shown a positive trend in revenue growth, with a notable increase in revenues compared to the same quarter last year [2] Market Position - N-able shares have underperformed the market, losing approximately 16.7% since the beginning of the year, while the S&P 500 has gained 15.6% [3] - The current Zacks Rank for N-able is 3 (Hold), suggesting that the stock is expected to perform in line with the market in the near future [6] Future Outlook - The consensus EPS estimate for the upcoming quarter is $0.07 on revenues of $124.6 million, and for the current fiscal year, it is $0.35 on revenues of $501.5 million [7] - The outlook for the Technology Services industry, where N-able operates, is favorable, ranking in the top 38% of Zacks industries, indicating potential for outperformance [8]

Financial Performance & Growth - N-able's Annual Recurring Revenue (ARR) reached $528 million as of September 30, 2025[8] - The company achieved a Net Retention Rate of 102% (TTM)[8] - N-able experienced 14% ARR growth[8] - The Non-GAAP Adjusted EBITDA Margin (TTM) was 31%[8] - The Non-GAAP Gross Margin (TTM) was 81%[8] - The company projects full-year 2025 revenue between $507.7 million and $508.7 million, representing a 9% year-over-year growth (8% at constant currency)[62] - The company projects full-year 2025 Adjusted EBITDA between $148.2 million and $149.2 million, with a 29% margin[62] Market Opportunity & Strategy - The Small and Mid-market IT Total Addressable Market (TAM) is estimated at $2.1 trillion in 2025[13] - N-able estimates its total TAM across Unified Endpoint Management (UEM), Data Protection, and Security Operations at $44 billion[22] - N-able sees a cross-sell opportunity of over $2.5 billion across its product lines[52]

Financial Performance - Total revenue for Q3 2025 was $131.7 million, reflecting a 13.1% year-over-year growth, or 11.6% growth on a constant currency basis[4] - Subscription revenue reached $130.5 million, marking a 13.5% year-over-year increase, or 11.9% on a constant currency basis[4] - Total Annual Recurring Revenue (ARR) was $528.1 million, representing a 14.2% year-over-year growth, or 12.9% on a constant currency basis[4] - Adjusted EBITDA for Q3 2025 was $41.4 million, with an adjusted EBITDA margin of 31.4%[4] - GAAP net income was $1.4 million, or $0.01 per diluted share, while non-GAAP net income was $25.4 million, or $0.13 per diluted share[4] - The financial outlook for Q4 2025 includes expected total revenue in the range of $126.5 to $127.5 million, representing approximately 9% year-over-year growth[11] - GAAP subscription revenue for Q3 2025 was $130.5 million, representing a 13.5% increase from $115.0 million in Q3 2024[39] - Non-GAAP subscription revenue on a constant currency basis for Q3 2025 was $128.7 million, reflecting an 11.9% growth compared to $115.0 million in Q3 2024[39] Cash Flow and Assets - As of September 30, 2025, total cash and cash equivalents were $101.4 million, with total debt at $331.7 million[5] - Cash provided by operating activities for the nine months ended September 30, 2025, was $67.87 million, compared to $53.45 million in the same period of 2024, reflecting a 26.9% increase[31] - Cash and cash equivalents at the end of Q3 2025 were $101.44 million, down from $174.45 million at the end of Q3 2024[31] - Unlevered free cash flow is used to evaluate cash flow from operations after capital expenditures, excluding transaction-related costs and restructuring costs, but does not represent cash available for discretionary expenses[22] Expenses and Liabilities - Total operating expenses increased to $90.46 million in Q3 2025, up from $72.63 million in Q3 2024, marking a rise of 24.5%[29] - Research and development expenses for the nine months ended September 30, 2025, were $75.41 million, compared to $67.47 million in 2024, an increase of 11.5%[29] - Interest expense for the nine months ended September 30, 2025, was $23.79 million, compared to $22.76 million in the same period of 2024, reflecting a year-over-year increase of 4.5%[29] - Total liabilities stood at $584,666,000 as of September 30, 2025, slightly up from $579,559,000 as of December 31, 2024, showing a marginal increase of approximately 0.2%[27] Equity and Goodwill - Total stockholders' equity rose to $813,386,000 as of September 30, 2025, compared to $759,288,000 as of December 31, 2024, marking an increase of about 7.1%[27] - Goodwill increased to $1,024,311,000 as of September 30, 2025, from $977,013,000 as of December 31, 2024, indicating a rise of about 4.8%[27] Operational Highlights - N-able launched Cat-MIP, enhancing AI accuracy in cybersecurity and IT management, and released Anomaly Detection as a Service to bolster data protection[4] - N-able hosted its first annual Cyber Resilience Summit, focusing on the future of cyber resilience for small and mid-market organizations[4] - The company emphasizes a partner-first approach, integrating AI-powered capabilities and third-party solutions to enhance customer security and resilience[23] Profitability Metrics - Operating income decreased to $11.60 million in Q3 2025 from $23.91 million in Q3 2024, representing a decline of 51.5%[29] - Net income for Q3 2025 was $1.38 million, a significant drop from $10.76 million in Q3 2024, indicating a year-over-year decrease of 87.2%[29] - GAAP operating income for Q3 2025 was $11.6 million, a significant decline from $23.9 million in Q3 2024[37] - Non-GAAP operating income for Q3 2025 was $34.5 million, down from $37.5 million in Q3 2024[37] - Adjusted EBITDA for Q3 2025 was $41.4 million, with an adjusted EBITDA margin of 31.4%, down from 38.5% in Q3 2024[36]

Core Insights - N-able, Inc. successfully helped CRS Technology Consultants prevent a significant ransomware attack on a regional CPA firm, achieving resolution in under 24 hours without any ransom payment or data loss [1][2][3] Company Overview - N-able, Inc. is a global software company focused on delivering an end-to-end cyber resiliency platform, which includes capabilities for endpoint management, security operations, and data protection [1][6] - The company emphasizes a partner-first approach, combining its products with expert training and peer-led events to empower customers [6] Incident Details - The CPA firm faced a ransomware attack exploiting a known SonicWall vulnerability just days before critical federal tax deadlines [2] - CRS Technology Consultants utilized N-able's cyber resiliency platform to contain and remediate the attack swiftly, allowing the firm to resume operations by lunchtime on the same day [3][4] Response and Recovery - The N-able UEM solution provided real-time alerts as servers began to fail, enabling immediate action to contain the threat [5] - Behavioral AI in N-able's Endpoint Detection and Response solution detected suspicious activity, isolating compromised endpoints to prevent further spread of the attack [5] - Offsite backups via N-able's Cove Data Protection ensured that even destroyed local backups could be restored, maintaining business continuity [5] Strategic Implications - The incident showcased the importance of business resilience, demonstrating that with the right tools and preparation, organizations can recover from ransomware attacks effectively [4] - CRS Technology Consultants has since made N-able's Adlumin MDR a standard service for its clients, enhancing their overall security posture [3]

Core Insights - N-able, Inc. has received five new awards from various prestigious organizations, highlighting its commitment to fostering a thriving employee culture [1][2] - The company emphasizes professional growth, belonging, and well-being alongside innovation and performance, showcasing a holistic approach to employee experience [1] - Earlier in the year, N-able earned six additional awards, including recognitions for best company outlook, diversity, and career growth [2] Awards and Recognition - Recent accolades include Comparably awards for Happiest Employees, Best Company Perks & Benefits, and Best Company Work-Life Balance [6] - N-able also received the 2025 Tech Cares Award from TrustRadius and the Human Resources Executive of the Year award for Kathleen Pai from the Stevie® Awards [6] Company Mission and Culture - N-able's mission focuses on protecting businesses from evolving cyber threats through an end-to-end cyber resiliency platform [4] - The company promotes a partner-first approach, combining products with expert training and events to empower customers [4]

Core Insights - N-able, Inc. has announced its first Cyber Resilience Summit, scheduled for October 16, featuring two virtual sessions to engage a global audience [1] - The summit aims to gather industry experts, thought leaders, and security leaders to discuss the future of cyber resilience and its importance for small and medium-sized organizations [1]

Financial Data and Key Metrics Changes - Total ARR reached $513.7 million, growing 14% year over year, with a 12% increase on a constant currency basis [28] - Total revenue was $131.2 million, exceeding guidance by $4.7 million, representing approximately 10% year over year growth on a reported basis and 8% on a constant currency basis [28] - Adjusted EBITDA was $41.6 million, which is $6.6 million above the high end of guidance, resulting in an adjusted EBITDA margin of approximately 31.7% [30] - Dollar-based net revenue retention was approximately 102% on a reported basis and 101% on a constant currency basis [29] Business Line Data and Key Metrics Changes - Net new ARR growth was led by data protection, followed by security operations and unified endpoint management (UEM) [10] - Cove, the data protection solution, recorded its highest bookings and net new ARR quarter ever, with 25% year over year ARR growth [12] - Security operations, particularly the XDR and MDR offerings, showed healthy ARR growth, with Canalys reporting a 16% growth projection for MDR in 2025 [14] Market Data and Key Metrics Changes - Approximately 45% of revenue was generated outside of North America [31] - The company is seeing a healthy demand environment, with IT spending remaining stable among mid-market companies [68] Company Strategy and Development Direction - The company aims to expand its channel strategy to unlock new markets, focusing on resellers, system integrators, and distributors [22] - The growth strategy is built on three pillars: driving security success, scaling go-to-market efforts, and boosting customer expansion [25] - The company is focused on integrating AdLumen into its cyber resilience platform and enhancing its channel motion to capture mid-market opportunities [26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to execute and create long-term value amidst a complex threat landscape [35] - The outlook for the second half of 2025 suggests more growth in ARR compared to the first half, despite some foreign exchange dynamics [53] Other Important Information - The company began executing a share repurchase program as part of its capital allocation strategy, reflecting confidence in the business [27] - The company appointed Vikram Ramesh as Chief Marketing Officer to advance its mission and amplify its message globally [24] Q&A Session Summary Question: Can you provide more color on the go-to-market traction with resellers? - The go-to-market teams are finding a rhythm with three pillars to engage mid-market companies, leading to increased bookings and opportunities [38][39] Question: Where are we with the optimization and ASC 606 headwinds? - The company is seeing healthy renewal rates around 90%, indicating customer willingness to recommit [48] Question: Can you provide detail on the ARR guidance? - There are FX dynamics at play, but the second half implies more growth in ARR compared to the first half [53] Question: How are you educating MSP customers on the opportunity? - The company emphasizes augmenting MSP capabilities with its XDR technology, allowing them to focus on strategic initiatives [60] Question: What do you attribute the strength in the $50k customer adds to? - The focus on larger MSPs and the ability to cross-sell the portfolio are key drivers of strength in customer additions [62]