N-ABLE(NABL) - 2025 Q1 - Quarterly Results

N-able First Quarter 2025 Results Q1 2025 Performance Highlights 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 $494.5 million[1] Q1 2025 Financial Highlights vs. Q1 2024 | Metric | Q1 2025 ($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] Recent Business Highlights 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] - Expanded Microsoft Cloud management and security capabilities with Adlumin Breach Prevention for Microsoft 365[4] - Announced the upcoming launch of a built-in Vulnerability Management feature for its N-central and N-sight UEM products[4] - The Board of Directors approved a share repurchase program authorizing up to $75 million of its common stock[4] Financial Outlook N-able provided its non-GAAP financial outlook for Q2 and full-year 2025, raising full-year revenue guidance and projecting continued growth Q2 2025 Financial Outlook (Non-GAAP) | Metric | Range ($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 This section presents N-able's unaudited consolidated financial statements for Q1 2025, detailing its financial position and performance Consolidated Balance Sheets 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 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 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 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) 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 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 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 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 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][19] - Annual Recurring Revenue (ARR) is calculated by annualizing recurring revenue from subscriptions recognized on the last day of the reporting period[18] - 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] - 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]