N-ABLE(US:NABL)2025-05-08 13:30Financial Data and Key Metrics Changes - First quarter ARR grew 11% year over year in constant currency, with total ARR reaching $492.7 million, reflecting a 10% year-over-year growth on a reported basis [24][25] - First quarter revenue was $118.2 million, exceeding guidance by $2.2 million, representing approximately 4% year-over-year growth on a reported basis [25][26] - Adjusted EBITDA for the first quarter was $31.6 million, reflecting a 27% margin, which was above the high end of guidance [26][27] - Gross margin for the first quarter was 80.6%, down from 84.7% in the same period in 2024 [26] Business Line Data and Key Metrics Changes - Subscription revenue was $116.8 million, representing approximately 5% year-over-year growth on a reported basis [25] - The company ended the quarter with 2,398 customers contributing $50,000 or more of ARR, up approximately 10% year over year [25] - Dollar-based net revenue retention was approximately 101% on both a reported and constant currency basis [25] Market Data and Key Metrics Changes - Approximately 43% of revenue was generated outside of North America during the quarter [28] - The company is targeting $750 million in ARR by 2028, driven by three growth pillars: driving security success, scaling go-to-market efforts, and boosting customer expansion [7][8] Company Strategy and Development Direction - The company is focused on expanding its go-to-market strategy by partnering with a broader range of channel providers, including resellers and system integrators [18][19] - The launch of new security capabilities and the growth of channel partners are seen as key components of the company's innovation and growth strategy [33] - The company is committed to CMMC 2.0 readiness to enhance its appeal in regulated sectors [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the demand for cybersecurity solutions, noting that the need for cyber resiliency is a must for businesses [42] - Despite some anecdotal evidence of longer sales cycles, the overall demand remains strong, and the pipeline is robust [42][70] - The company raised its revenue and ARR guidance for the full year, reflecting strong first-quarter results and updated foreign exchange rates [29][30] Other Important Information - The company announced a $75 million share repurchase authorization program, indicating confidence in its business [24] - The adjusted EBITDA guidance for the full year was raised, with expectations of $134 million to $139 million, representing a margin of 27% to 28% [31] Q&A Session Summary Question: Contribution of AdLumin acquisition to revenue growth - The AdLumin acquisition contributed approximately $21 million of ARR at the time of acquisition, which should help in calculating organic growth rates [36][37] Question: Considerations for seasonality in ARR - Management expects ARR growth to be consistent throughout the year, with slight improvements as the year progresses [38] Question: Market spending environment and customer feedback - Demand for cybersecurity solutions remains strong, with no significant changes in metrics, although some deals are taking longer to close [42][70] Question: Dollar-based net revenue retention dynamics - Management expects the current retention rate to be a trough, with improvements driven by cross-selling opportunities [45][47] Question: Reseller traction and growth potential - The company is in the early stages of expanding its reseller network, with expectations for more significant impacts in 2026 [56][58] Question: Integration of offerings into a single platform - The company is focused on automating workflows and integrating its offerings to enhance efficiency and security for customers [96][100]