PART I - FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited consolidated financial statements for N-able, Inc. as of March 31, 2025, and for the three months then ended, show total revenue of **$118.2 million** and a net loss of **$7.2 million**, a significant shift from a net income of **$7.5 million** in the same period of 2024, with total assets increasing slightly to **$1.35 billion** and cash flow from operations improving significantly to **$19.7 million** from **$4.2 million** year-over-year [Consolidated Balance Sheets](index=5&type=section&id=Consolidated%20Balance%20Sheets) As of March 31, 2025, total assets were **$1.352 billion**, a slight increase from **$1.339 billion** at December 31, 2024, primarily driven by a rise in goodwill and cash and cash equivalents, while total liabilities decreased slightly to **$577.0 million** and total stockholders' equity increased to **$775.1 million** Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $183,785 | $183,920 | | **Goodwill** | $991,352 | $977,010 | | **Total Assets** | **$1,352,077** | **$1,338,840** | | **Total Current Liabilities** | $153,670 | $150,090 | | **Long-term Debt, net** | $329,121 | $329,600 | | **Total Liabilities** | **$576,976** | **$579,550** | | **Total Stockholders' Equity** | **$775,101** | **$759,280** | [Consolidated Statements of Operations](index=6&type=section&id=Consolidated%20Statements%20of%20Operations) For the three months ended March 31, 2025, N-able reported a net loss of **$7.2 million**, compared to a net income of **$7.5 million** in the prior-year period, as revenue grew **3.9%** to **$118.2 million**, but a significant increase in total cost of revenue (up **51.3%**) and operating expenses (up **18.3%**) led to a sharp decline in operating income from **$20.5 million** to **$1.8 million** Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Subscription and other revenue | $118,197 | $113,740 | | Gross Profit | $90,519 | $95,450 | | Operating Income | $1,824 | $20,490 | | Net (Loss) Income | $(7,162) | $7,450 | | Diluted (Loss) Income Per Share | $(0.04) | $0.00 | [Consolidated Statements of Cash Flows](index=9&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the first quarter of 2025, net cash provided by operating activities was **$19.7 million**, a substantial increase from **$4.2 million** in Q1 2024, while net cash used in investing activities was **$6.1 million** and net cash used in financing activities decreased to **$7.3 million** from **$11.9 million** year-over-year, resulting in an **$8.9 million** increase in cash and cash equivalents during the quarter Cash Flow Summary (in thousands) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $19,677 | $4,184 | | Net cash used in investing activities | $(6,076) | $(5,127) | | Net cash used in financing activities | $(7,289) | $(11,916) | | **Net increase (decrease) in cash** | **$8,894** | **$(13,821)** | | **Cash and cash equivalents, end of period** | **$94,090** | **$139,227** | [Notes to the Consolidated Financial Statements](index=10&type=section&id=Notes%20to%20the%20Consolidated%20Financial%20Statements) This section provides detailed explanations of the company's accounting policies and financial results, covering topics such as operations, revenue recognition, acquisitions, goodwill, parent company relationships, fair value measurements, debt structure, and geographic revenue breakdown - The company provides cloud-based security, data protection, and unified endpoint management software solutions for managed service providers (MSPs) that serve small and medium-sized businesses[30](index=30&type=chunk) - On November 20, 2024, the company acquired Adlumin, Inc. for aggregate consideration including **$98.7 million** in cash, up to **1.57 million** shares of common stock, and potential future payments of up to **$150 million** in deferred and contingent consideration[56](index=56&type=chunk) - The company operates as a single operating and reportable segment, with revenue from the United States accounting for **51.2%** of total revenue in Q1 2025, up from **47.9%** in Q1 2024[117](index=117&type=chunk)[119](index=119&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the financial results for Q1 2025, highlighting a **3.9%** revenue increase to **$118.2 million** and a **10.3%** rise in Annual Recurring Revenue (ARR) to **$492.7 million**, detailing the drivers behind increased costs that led to a net loss of **$7.2 million** compared to a net income of **$7.5 million** in the prior year, and covering the impact of the Adlumin acquisition, the Long-Term Contract Initiative, non-GAAP measures like Adjusted EBITDA (which decreased to **$31.6 million** from **$39.6 million**), and the company's liquidity position Q1 2025 Key Financial Highlights | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Total Revenue | $118.2M | $113.7M | +3.9% | | Net (Loss) Income | $(7.2)M | $7.5M | -196% | | Adjusted EBITDA | $31.6M | $39.6M | -20.2% | | Cash Flow from Operations | $19.7M | $4.2M | +370% | - Annual Recurring Revenue (ARR) grew **10.3%** to **$492.7 million** as of March 31, 2025, up from **$446.6 million** a year prior, driven by steady demand and the Adlumin acquisition[126](index=126&type=chunk) - The annual dollar-based net revenue retention rate was approximately **101%** for the trailing twelve months ended March 31, 2025, down from **111%** a year ago, reflecting pressure from pricing changes and the Long-Term Contract Initiative[145](index=145&type=chunk) - The decrease in profitability was primarily due to increased cost of revenue and operating expenses related to the Adlumin acquisition, including higher amortization, personnel costs, and transaction-related expenses[129](index=129&type=chunk)[148](index=148&type=chunk)[149](index=149&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=38&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company is exposed to market risks, primarily from interest rate fluctuations on its variable-rate debt and foreign currency exchange rate movements, with **$332.6 million** in borrowings under its Credit Agreement as of March 31, 2025, where a hypothetical **100 basis point** increase in interest rates would result in an approximate **$3.4 million** annual increase in interest expense, and faces foreign currency transaction and translation risks from its global operations, particularly involving the Euro, British Pound Sterling, and Canadian Dollar against the U.S. Dollar - The company's debt under the Credit Agreement bears interest at a floating SOFR-based rate, where a hypothetical **100 basis point** increase in interest rates would increase annual interest expense by approximately **$3.4 million**[186](index=186&type=chunk)[187](index=187&type=chunk) - As a global company, N-able is exposed to foreign currency exchange risk from selling in multiple currencies and operating in various countries, with key currencies including the Euro, British Pound Sterling, and Canadian Dollar[191](index=191&type=chunk) [Item 4. Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, evaluated the company's disclosure controls and procedures as of March 31, 2025, and concluded they were **effective at a reasonable assurance level**, with no material changes in the company's internal control over financial reporting during the first quarter of 2025 - The CEO and CFO concluded that as of March 31, 2025, the company's disclosure controls and procedures were **effective at a reasonable assurance level**[197](index=197&type=chunk) - No changes occurred during the quarter ended March 31, 2025, that have materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[198](index=198&type=chunk) PART II - OTHER INFORMATION [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings in the ordinary course of business, and management believes the resolution of any pending claims is **not expected to have a material adverse impact** on its financial statements - The company states that the resolution of any pending legal claims is **not expected to have a material adverse impact** on its consolidated financial statements, cash flows, or financial position[109](index=109&type=chunk)[200](index=200&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) There have been **no material changes** to the company's risk factors from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - **No material changes** in risk factors were reported from those disclosed in the 2024 Annual Report[201](index=201&type=chunk) [Item 2. Unregistered Sales of Equity and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20and%20Use%20of%20Proceeds) On March 11, 2025, the board of directors approved a share repurchase program authorizing the repurchase of up to **$75.0 million** of the company's common stock, which has no expiration date and does not obligate the company to acquire a specific amount of shares, and no shares were repurchased under this program in the three months ended March 31, 2025 - A share repurchase program for up to **$75.0 million** of common stock was approved on March 11, 2025[202](index=202&type=chunk) - The company **did not repurchase any shares** under the program during the first quarter of 2025[202](index=202&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) During the first quarter of 2025, **no directors or officers adopted or terminated any Rule 10b5-1 trading plans** or other non-Rule 10b5-1 trading arrangements - **No directors or officers adopted or terminated any Rule 10b5-1 trading plans** during the three months ended March 31, 2025[203](index=203&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section provides an index of the exhibits filed with the Form 10-Q, including agreements related to the spin-off from SolarWinds, corporate governance documents, and officer certifications - Lists exhibits filed with the report, including the Separation and Distribution Agreement, corporate charters, and Sarbanes-Oxley certifications[206](index=206&type=chunk)

Company Overview - N-able's Annual Recurring Revenue (ARR) reached $493 million as of March 31, 2025 [8] - The company boasts a recurring revenue of approximately 100% [8] - N-able achieved a Net Retention Rate (TTM) of 101% [8] - ARR growth is at 11% at constant currency [8] - Non-GAAP Adjusted EBITDA Margin (TTM) stands at 34% [8] - Non-GAAP Gross Margin (TTM) is 83% [8] Market Opportunity - The Small and Mid-market (SMB) IT Total Addressable Market (TAM) is estimated at $2.1 trillion in 2025 [13] - N-able's total addressable market is $44 billion, encompassing Unified Endpoint Management (UEM) at $14 billion, Data Protection at $6 billion, and Security Operations at $24 billion [22] Financial Outlook - Q2 2025 ARR is projected to be between $492 million and $497 million, representing a year-over-year growth of 6-7% or 6-8% at constant currency [60] - FY 2025 ARR is projected to be between $519 million and $525 million, representing a year-over-year growth of 8-9% or 7-9% at constant currency [60]

[N-able First Quarter 2025 Results](index=1&type=section&id=N-able%20First%20Quarter%202025%20Results) [Q1 2025 Performance Highlights](index=1&type=section&id=First%20quarter%202025%20financial%20highlights) N-able reported strong Q1 2025 results, exceeding guidance with solid revenue and ARR growth, despite a GAAP net loss, while raising full-year outlook - Raised the midpoint of the full-year 2025 revenue outlook from **$489.5 million** to **$494.5 million**[1](index=1&type=chunk) Q1 2025 Financial Highlights vs. Q1 2024 | Metric | Q1 2025 ($M) | YoY Growth (Reported) | YoY Growth (Constant Currency) | | :--- | :--- | :--- | :--- | | Total Revenue | $118.2 | 3.9% | 5.7% | | Subscription Revenue | $116.8 | 4.8% | 6.6% | | Total ARR | $492.7 | 10.3% | 10.9% | | Adjusted EBITDA | $31.6 | -20.2% | N/A | | GAAP Net (Loss) Income | $(7.2) | N/A | N/A | | Non-GAAP Net Income | $15.6 | -21.2% | N/A | | GAAP Diluted EPS | $(0.04) | N/A | N/A | | Non-GAAP Diluted EPS | $0.08 | -27.3% | N/A | - As of March 31, 2025, the company held **$94.1 million** in cash and cash equivalents and had total debt of **$332.6 million**[5](index=5&type=chunk) [Recent Business Highlights](index=1&type=section&id=Additional%20recent%20business%20highlights) N-able advanced strategic initiatives by launching new security capabilities, enhancing product offerings, and approving a **$75 million** share repurchase program - Launched its first annual 2025 State of the SOC Report, providing insights on security operations trends[4](index=4&type=chunk) - Expanded Microsoft Cloud management and security capabilities with Adlumin Breach Prevention for Microsoft 365[4](index=4&type=chunk) - Announced the upcoming launch of a built-in Vulnerability Management feature for its N-central and N-sight UEM products[4](index=4&type=chunk) - The Board of Directors approved a share repurchase program authorizing up to **$75 million** of its common stock[4](index=4&type=chunk) [Financial Outlook](index=2&type=section&id=Financial%20Outlook) N-able provided its non-GAAP financial outlook for Q2 and full-year 2025, raising full-year revenue guidance and projecting continued growth Q2 2025 Financial Outlook (Non-GAAP) | Metric | Range ($M) | YoY Growth (Reported & Constant Currency) | | :--- | :--- | :--- | | Total Revenue | $125.5 - $126.5 | ~5% to 6% | | Adjusted EBITDA | $34.0 - $35.0 | ~27% to 28% of revenue | Full-Year 2025 Financial Outlook (Non-GAAP) | Metric | Range ($M) | YoY Growth (Reported) | YoY Growth (Constant Currency) | | :--- | :--- | :--- | :--- | | Total ARR | $519 - $525 | 8% to 9% | ~7% to 9% | | Total Revenue | $492 - $497 | ~6% to 7% | ~6% to 8% | | Adjusted EBITDA | $134 - $139 | ~27% to 28% of revenue | N/A | [Financial Statements](index=8&type=section&id=Financial%20Statements) This section presents N-able's unaudited consolidated financial statements for Q1 2025, detailing its financial position and performance [Consolidated Balance Sheets](index=8&type=section&id=Consolidated%20Balance%20Sheets) N-able's total assets increased to **$1.35 billion** as of March 31, 2025, with a marginal decrease in liabilities and an increase in stockholders' equity Balance Sheet Summary (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | **$1,352,077** | **$1,338,847** | | Cash and cash equivalents | $94,090 | $85,196 | | Goodwill | $991,352 | $977,013 | | **Total Liabilities** | **$576,976** | **$579,559** | | Long-term debt, net | $329,121 | $329,606 | | **Total Stockholders' Equity** | **$775,101** | **$759,288** | [Consolidated Statements of Operations](index=9&type=section&id=Consolidated%20Statements%20of%20Operations) N-able reported **$118.2 million** in Q1 2025 total revenue, but higher operating expenses led to a significant decrease in operating income and a net loss of **$7.2 million** Statement of Operations Summary (in thousands, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Subscription and other revenue | $118,197 | $113,749 | | Gross Profit | $90,519 | $95,452 | | Operating Income | $1,824 | $20,491 | | Net (Loss) Income | $(7,162) | $7,456 | | Diluted (Loss) Income Per Share | $(0.04) | $0.04 | [Consolidated Statements of Cash Flows](index=10&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Net cash provided by operating activities significantly improved to **$19.7 million** in Q1 2025, resulting in an **$8.9 million** net increase in cash for the quarter Cash Flow Summary (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $19,677 | $4,184 | | Less: Capital Expenditures | $(6,076) | $(5,127) | | Free cash flow | $13,601 | $(943) | | Add: Cash paid for interest & other items | $14,534 | $8,222 | | **Unlevered free cash flow** | **$28,135** | **$7,279** | [Reconciliation of GAAP to Non-GAAP Financial Measures](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures) This section details the reconciliation of GAAP to non-GAAP financial measures, adjusting for items like stock-based compensation and amortization to present core operating performance [Reconciliation of GAAP to Non-GAAP Financial Measures (Summary)](index=11&type=section&id=Reconciliation%20of%20GAAP%20to%20Non-GAAP%20Financial%20Measures%20(Summary)) N-able's Q1 2025 GAAP operating income of **$1.8 million** was adjusted to a non-GAAP operating income of **$25.3 million**, with a GAAP net loss of **$7.2 million** reconciled to a non-GAAP net income of **$15.6 million** GAAP to Non-GAAP Reconciliation Summary (Q1 2025, in thousands) | Metric | GAAP | Adjustments | Non-GAAP | | :--- | :--- | :--- | :--- | | Gross Profit | $90,519 | $4,782 | $95,301 | | Operating Income | $1,824 | $23,466 | $25,290 | | Net (Loss) Income | $(7,162) | $22,783 | $15,621 | | Diluted EPS | $(0.04) | $0.12 | $0.08 | [Reconciliation of GAAP Net (Loss) Income to Adjusted EBITDA](index=13&type=section&id=Reconciliation%20of%20GAAP%20Net%20(Loss)%20Income%20to%20Adjusted%20EBITDA) Adjusted EBITDA for Q1 2025 was **$31.6 million**, or **26.8%** margin, derived from GAAP net loss by adding back non-operating and non-cash items Adjusted EBITDA Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net (loss) income | $(7,162) | $7,456 | | Adjustments (Amortization, Depreciation, Taxes, Interest, etc.) | $38,805 | $32,183 | | **Adjusted EBITDA** | **$31,643** | **$39,639** | | Adjusted EBITDA Margin | 26.8% | 34.8% | [Reconciliation of GAAP Revenue to Non-GAAP Revenue on a Constant Currency Basis](index=14&type=section&id=Reconciliation%20of%20GAAP%20Revenue%20to%20Non-GAAP%20Revenue%20on%20a%20Constant%20Currency%20Basis) Q1 2025 GAAP total revenue growth was **3.9%** year-over-year, with constant currency growth at **5.7%** after adjusting for a **$2.0 million** negative currency impact Constant Currency Revenue Reconciliation (Q1 2025 vs Q1 2024) | Revenue Type | GAAP Growth | Constant Currency Growth | | :--- | :--- | :--- | | Subscription Revenue | 4.8% | 6.6% | | Total Revenue | 3.9% | 5.7% | [Reconciliation of Unlevered Free Cash Flow](index=15&type=section&id=Reconciliation%20of%20Unlevered%20Free%20Cash%20Flow) Unlevered free cash flow significantly increased to **$28.1 million** in Q1 2025, calculated from operating cash flow adjusted for capital expenditures and interest Unlevered Free Cash Flow Reconciliation (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $19,677 | $4,184 | | Less: Capital Expenditures | $(6,076) | $(5,127) | | Free cash flow | $13,601 | $(943) | | Add: Cash paid for interest & other items | $14,534 | $8,222 | | **Unlevered free cash flow** | **$28,135** | **$7,279** | [Explanation of Non-GAAP Financial Measures and Other Metrics](index=4&type=section&id=Non-GAAP%20Financial%20Measures) N-able utilizes non-GAAP financial measures and key metrics like ARR, Adjusted EBITDA, and Unlevered Free Cash Flow to provide a clearer view of core operating performance - The company uses non-GAAP measures to exclude items that management does not consider part of core operating results, such as stock-based compensation, amortization of acquired assets, transaction costs, and spin-off costs[13](index=13&type=chunk)[19](index=19&type=chunk) - Annual Recurring Revenue (ARR) is calculated by annualizing recurring revenue from subscriptions recognized on the last day of the reporting period[18](index=18&type=chunk) - Adjusted EBITDA is defined as net income excluding amortization, depreciation, taxes, interest, foreign currency effects, transaction costs, stock-based compensation, and other specific costs[21](index=21&type=chunk) - Unlevered Free Cash Flow is a liquidity measure calculated as cash flow from operations, less capital expenditures, and before the impact of capital structure and certain one-time items[23](index=23&type=chunk)

Group 1 - The article recommends a hold rating for N-able (NYSE: NABL) due to expected uncertain near-term performance impacting the stock, despite a positive medium-term outlook [1] - An ideal investment is characterized by core business performance in a sector projected to experience structural growth exceeding GDP growth over the next 5-10 years [1] - Profits should stem from sustainable competitive advantages that lead to attractive unit economics, managed by competent, ethical, and long-term thinkers, and offered at a fair valuation [1]

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 in 2025 [22][34] - The strategic acquisition of Adlumin is expected to enhance the product suite and create new growth avenues in the high-demand security market [38][39] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's position for growth in 2025, citing strong demand in the market and a robust business model [58][61] - 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][110] 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 technology and partnerships to enhance its serviceable addressable market and unlock significant growth potential [21][22] 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: Is there an expected headwind or benefit from moving customers to annual contracts? - The initiative will continue, with expectations for a natural blend up over time, but no significant uptick like in 2024 is anticipated [68] Question: How has engagement been on the partner side for Adlumin? - Resellers have been enthusiastic about the acquisition, seeing it as a partnership that provides a one-stop shop for various offerings [74] Question: What competitive landscape does Adlumin face? - Adlumin is seen as a strong competitor due to its cloud-native, AI-driven technology and endpoint-agnostic capabilities, which differentiate it from larger competitors [80][82] Question: What is the expected organic growth rate for 2025? - The company expects higher single-digit growth rates, with a focus on scaling new customer acquisition motions and leveraging the Adlumin acquisition [112] Question: How is the company exposed to the U.S. federal government market? - The company does not have direct visibility into the end customers of MSPs but expects to remain diversified and not significantly impacted by government market dynamics [127][128]

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]