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]

Group 1 - The core recommendation for N-able (NYSE: NABL) is to maintain a hold rating due to expected transitionary tailwinds impacting its valuation [1] - The ideal investment criteria include operating in a sector with structural growth exceeding GDP growth over the next 5-10 years, possessing sustainable competitive advantages, and being managed by competent and ethical long-term thinkers [1] - A fair valuation is also a critical component of the investment thesis for N-able [1]

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]

Core Viewpoint - N-able (NABL) reported quarterly earnings of $0.13 per share, exceeding the Zacks Consensus Estimate of $0.10 per share, marking a 30% earnings surprise compared to the previous year's earnings of $0.09 per share [1] - The company also posted revenues of $116.44 million for the quarter ended September 2024, surpassing the Zacks Consensus Estimate by 1.44% and showing an increase from $107.57 million year-over-year [2] Financial Performance - N-able has consistently surpassed consensus EPS estimates over the last four quarters, achieving this four times [2] - The company’s shares have declined approximately 4% since the beginning of the year, contrasting with the S&P 500's gain of 24.3% [3] Future Outlook - The future performance of N-able's stock will largely depend on management's commentary during the earnings call and the trends in earnings estimate revisions [3][4] - The current consensus EPS estimate for the upcoming quarter is $0.11 on revenues of $116.48 million, and for the current fiscal year, it is $0.46 on revenues of $464.42 million [7] Industry Context - The Technology Services industry, to which N-able belongs, is currently ranked in the top 28% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - The performance of N-able's stock may also be influenced by the overall industry outlook and trends in earnings estimate revisions [5][8]

Core Viewpoint - N-able (NABL) is experiencing significant selling pressure, having declined 10% over the past four weeks, but is now positioned for a potential trend reversal as it enters oversold territory with strong analyst support for better-than-expected earnings [1]. Group 1: Technical Indicators - The Relative Strength Index (RSI) is utilized to identify oversold stocks, with a reading below 30 indicating oversold conditions [2]. - NABL's current RSI reading is 27.02, suggesting that the heavy selling may be exhausting itself and a trend reversal could be imminent [3]. Group 2: Earnings Estimates - There is a strong consensus among sell-side analysts that earnings estimates for NABL will improve, with a 4.2% increase in the consensus EPS estimate over the last 30 days [3]. - An upward trend in earnings estimate revisions typically correlates with price appreciation in the near term [3]. Group 3: Analyst Ratings - 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 [3].

N-able, Inc. (NYSE:NABL) Q2 2024 Earnings Call Transcript August 8, 2024 8:30 AM ET Company Participants Griffin Gyr - Investor Relations John Pagliuca - President and Chief Executive Officer Tim O'Brien - Executive Vice President & Chief Financial Officer Conference Call Participants Mike Richards - RBC Capital Markets Jason Ader - William Blair Charlotte Bedick - J.P. Morgan Mike Cikos - Needham Operator Welcome to the N-able Second Quarter 2024 Earnings Call. My name is Sam and I will be coordinating you ...