N-able Announces Fourth Quarter and Full-Year 2024 Results

Exceeded Fourth Quarter Revenue Guidance, Delivering 7% Year-Over-Year Growth

Full-Year 2025 Adjusted EBITDA Outlook of 27% to 28%

Full-Year 2025 Constant Currency ARR Outlook of 7% to 9% Year-Over-Year Growth

BURLINGTON, Mass.--(BUSINESS WIRE)--March 03, 2025-- 

N-able, Inc. (NYSE:NABL), a global software company helping IT services providers deliver security, data protection as-a-service and unified endpoint management, today reported results for its fourth quarter and full year ended December 31, 2024.

"We closed 2024 in a position of strength and we believe we are poised for even greater success in 2025," said N-able president and CEO John Pagliuca. "Businesses everywhere need cyber-resilience, and we are investing to further our security leadership, deepen our channel partnerships, and deliver the critical protection our customers deserve. Our guide calls for over $500 million of ARR and strong profit margins. We are executing at scale with a durable business model."

"N-able made considerable progress across the business in 2024," added N-able CFO Tim O'Brien. "Our product and go-to-market teams executed critical initiatives, the strategic acquisition of Adlumin expanded the aperture of our business, and we once again operated above the Rule of 40. We firmly believe we have the right pieces in place to win in our markets, and are investing to seize an expanding market opportunity and scale N-able to new heights."

Fourth quarter 2024 financial highlights:

   -- 
 Total revenue of $116.5 million, representing 7.5% year-over-year 
      growth, or 7.5% year-over-year growth on a constant currency basis. 
 
 
   -- 
 Subscription revenue of $115.0 million, representing 8.5% 
      year-over-year growth, or 8.5% year-over-year growth on a constant 
      currency basis. 
 
 
   -- 
 GAAP gross margin of 80.0% and non-GAAP gross margin of 82.3%. 
 
 
   -- 
 GAAP net income of $3.3 million, or $0.02 per diluted share, and 
      non-GAAP net income of $18.8 million, or $0.10 per diluted share. 
 
 
   -- 
 Adjusted EBITDA of $38.1 million, representing an adjusted EBITDA 
      margin of 32.7%. 
 

Full-year 2024 financial highlights:

   -- 
 Total revenue of $466.1 million, representing 10.5% year-over-year 
      growth, or 10.2% year-over-year growth on a constant currency basis. 
 
 
   -- 
 Subscription revenue of $459.0 million, representing 11.4% 
      year-over-year growth, or 11.1% year-over-year growth on a constant 
      currency basis. 
 
 
   -- 
 Total ARR of $482.5 million, representing 8.6% year-over-year growth, 
      or 10.3% year-over-year growth on a constant currency basis. 
 
 
   -- 
 GAAP gross margin of 82.7% and non-GAAP gross margin of 83.8%. 
 
 
   -- 
 GAAP net income of $31.0 million, or $0.16 per diluted share, and 
      non-GAAP net income of $89.6 million, or $0.48 per diluted share. 
 
 
   -- 
 Adjusted EBITDA of $169.4 million, representing an adjusted EBITDA 
      margin of 36.3%. 
 

For a reconciliation of our GAAP to non-GAAP results, please see the tables below.

Additional highlights for the fourth quarter of 2024 include:

   -- 
 N--able acquires existing strategic partner Adlumin, adding 
      cloud-native XDR and MDR capabilities to its end-to-end security and IT 
      management platform. The acquisition will allow N--able to incorporate 
      Adlumin's innovative technology with N--able's industry-leading platform 
      that combines security, data protection-as-a-service and unified endpoint 
      management. This powerful combination positions N--able to deliver deeper 
      insights and remediation across the entire IT environment--advancing the 
      evolution of N--able's cybersecurity portfolio. 
 
 
   -- 
 N-able adds key hires to further strengthen its Channel strategy. The 
      addition of Jonathan Bartholomew, Vice President of Channel Sales; Paul 
      Monaghan, Vice President of EMEA Sales; and Andy Hudson, Vice President 
      of International Marketing, underscore the expanding support N--able has 
      for the rapidly growing IT services market and its multi-layered channel 
      with an active presence in over 140 countries. 
 

Balance Sheet

As of December 31, 2024, total cash and cash equivalents were $85.2 million and total debt, net of debt issuance costs, was $333.1 million.

The financial results included in this press release are preliminary and pending final review by the company and its external auditors. Financial results will not be final until N-able files its annual report on Form 10-K for the period. Information about N-able's use of non-GAAP financial measures is provided below under "Non-GAAP Financial Measures."

Financial Outlook

As of March 3, 2025, N-able is providing its financial outlook for the first quarter of 2025 and full-year 2025. The financial information below represents forward-looking non-GAAP financial information, including adjusted EBITDA. These non-GAAP financial measures exclude, among other items mentioned below, amortization of acquired intangible assets and developed technology, depreciation expense, income tax expense, interest expense, net, unrealized foreign currency (gains) losses, transaction related costs, spin-off costs, stock-based compensation expense and related employer-paid payroll taxes and restructuring and other costs. We have not reconciled our estimates of these non-GAAP financial measures to their most directly comparable GAAP measure as a result of uncertainty regarding, and the potential variability of, these excluded items in future periods. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these excluded items could be material to our results computed in accordance with GAAP in future periods. Our reported results provide reconciliations of non-GAAP financial measures to their nearest GAAP equivalents.

The financial outlook provided below reflects N-able's expectations, as of the date of this release, regarding the impact on its business of changing foreign exchange rates and current macroeconomic dynamics.

Financial Outlook for the First Quarter of 2025

N-able management currently expects to achieve the following results for the first quarter of 2025:

   -- 
 Total revenue in the range of $115.0 to $116.0 million, representing 
      approximately 1% to 2% year-over-year growth, or approximately 3% to 4% 
      growth on a constant currency basis. 
 
 
   -- 
 Adjusted EBITDA in the range of $27.5 to $28.5 million, representing 
      approximately 24% to 25% of total revenue. 
 

Financial Outlook for Full-Year 2025

N-able management currently expects to achieve the following results for the full-year 2025:

   -- 
 Total ARR in the range of $514.0 to $522.0 million, representing 7% to 
      8% year-over-year growth, or approximately 7% to 9% growth on a constant 
      currency basis. 
 
 
   -- 
 Total revenue in the range of $486.5 to $492.5 million, representing 
      approximately 4% to 6% year-over-year growth, or approximately 6% to 8% 
      growth on a constant currency basis. 
 
 
   -- 
 Adjusted EBITDA in the range of $132.0 to $138.0 million, representing 
      approximately 27% to 28% of total revenue. 
 

Additional details on the company's outlook will be provided on the conference call.

Conference Call and Webcast

In conjunction with this announcement, N-able will host a conference call today to discuss its financial results, business and business outlook at 8:30 a.m. ET on March 3, 2025. A live webcast of the call will be available on the N-able Investor Relations website at http://investors.n-able.com. A replay of the webcast will be available on a temporary basis shortly after the event on the N-able Investor Relations website.

Forward-Looking Statements

This press release contains "forward-looking" statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the fourth quarter and full-year 2024 and the impact of macroeconomic conditions on our business. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be signified by terms such as "aim," "anticipate," "believe," "continue," "expect," "feel," "intend," "estimate," "seek," "plan," "may," "can," "could," "should," "will," "would" or similar expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially and adversely different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the following: (a) the impact of adverse economic conditions; (b) our ability to sell subscriptions to new customers, to sell additional solutions to our existing customers and to increase the usage of our solutions by our existing customers, as well as our ability to generate and maintain customer loyalty; (c) any decline in our renewal or net retention rates; (d) the possibility that general economic, political, legal and regulatory conditions and uncertainty may cause information technology spending to be reduced or purchasing decisions to be delayed, including as a result of inflation, actions taken by central banks to counter inflation, rising interest rates, war and political unrest, military conflict (including between Russia and Ukraine and in the Middle East), terrorism, sanctions, trade or other issues in the U.S. and internationally, including increased tariffs or trade wars, or other geopolitical events globally, or that such factors may otherwise harm our

business, financial condition or results of operations; (e) any inability to generate significant volumes of high-quality sales leads from our digital marketing initiatives and convert such leads into new business at acceptable conversion rates; (f) any inability to successfully identify, complete and integrate acquisitions and manage our growth effectively; (g) any inability to resell third-party software or integrate third-party software into our solutions, or find suitable replacements for such third-party software; (h) risks associated with our international operations; (i) foreign exchange gains and losses related to expenses and sales denominated in currencies other than the functional currency of an associated entity; (j) risks that cyberattacks, including the cyberattack on SolarWinds' Orion Software Platform and internal systems announced by SolarWinds in December 2020 (the "Cyber Incident"), and other security incidents may result in compromises or breaches of our, our customers', or their SMB and mid-market customers' systems, the insertion of malicious code, malware, ransomware or other vulnerabilities into our, our customers', or their SMB and mid-market customers' environments, the exploitation of vulnerabilities in our, our customers', or their SMB and mid-market customers' security, the theft or misappropriation of our, our customers', or their SMB and mid-market customers' proprietary and confidential information, and interference with our, our customers', or their SMB and mid-market customers' operations, exposure to legal and other liabilities, higher customer and employee attrition and the loss of key personnel, negative impacts to our sales, renewals and upgrades and reputational harm and other serious negative consequences, any or all of which could materially harm our business; (k) our status as a controlled company; (l) our ability to attract and retain qualified employees and key personnel; (m) the timing and success of new product introductions and product upgrades by us or our competitors; (n) our ability to maintain or grow our brands, including the Adlumin brand; (o) our ability to protect and defend our intellectual property and not infringe upon others' intellectual property; (p) the possibility that our operating income could fluctuate and may decline as a percentage of revenue as we make further expenditures to expand our operations in order to support growth in our business; (q) our indebtedness, including increased borrowing costs resulting from rising interest rates, potential restrictions on our operations and the impact of events of default; (r) our ability to operate our business internationally and increase sales of our solutions to our customers located outside of the United States; (s) risks related to our spin-off from SolarWinds into a newly created and separately-traded public company, including that the spin-off may not achieve some or all of any anticipated benefits with respect to our business; that the distribution, together with certain related transactions, may not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, which could result in N-able incurring significant tax liabilities, and, in certain circumstances, requiring us to indemnify SolarWinds for material taxes and other related amounts pursuant to indemnification obligations under the tax matters agreement; and (t) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission, including the risk factors described in N-able's Annual Report on Form 10-K for the year ended December 31, 2023, that N-able filed with the SEC on February 29, 2024, and those that will be described in N-able's Annual Report on Form 10-K for the year ended December 31, 2024, that N-able anticipates filing on or about March 3, 2025. All information provided in this release is as of the date hereof and N-able undertakes no duty to update this information except as required by law.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with GAAP, we use certain non-GAAP financial measures to clarify and enhance our understanding, and aid in the period-to-period comparison, of our performance. We believe that these non-GAAP financial measures provide supplemental information that is meaningful when assessing our operating performance because they exclude the impact of certain amounts that our management and board of directors do not consider part of core operating results when assessing our operational performance, allocating resources, preparing annual budgets and determining compensation. Accordingly, these non-GAAP financial measures may provide insight to investors into the motivation and decision-making of management in operating the business.

N-able also believes that these non-GAAP financial measures are used by investors and securities analysts to (a) compare and evaluate its performance from period to period and (b) compare its performance to those of its competitors. These non-GAAP measures exclude certain items that can vary substantially from company to company depending upon their financing and accounting methods, the book value of their assets, their capital structures and the method by which their assets were acquired.

As a result, these non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, their most comparable GAAP measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. Certain items that are excluded from these non-GAAP financial measures can have a material impact on operating and net income.

N-able's management and board of directors compensate for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measure. Set forth in the tables below are the corresponding GAAP financial measures for each non-GAAP financial measure presented. Investors are encouraged to review the reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures that are set forth in the tables below.

Definitions of Non-GAAP and Other Metrics

Annual Recurring Revenue $(ARR)$. We calculate ARR by annualizing the recurring revenue and related usage revenue inclusive of discounts, excluding the impacts of credits and reserves, recognized during the last day of the reporting period from both long-term and month-to-month subscriptions. We believe ARR enhances the understanding of our business performance and the growth of our relationships with our customers.

Non-GAAP Gross Margin, Non-GAAP Operating Income and Non-GAAP Operating Margin. We provide non-GAAP total cost of revenue, non-GAAP gross margin, non-GAAP operating expense and non-GAAP operating income and related non-GAAP gross and operating margins excluding such items as stock-based compensation expense and related employer-paid payroll taxes, amortization of acquired intangible assets, transaction related costs, spin-off costs and restructuring costs and other. We define non-GAAP gross and operating margins as non-GAAP gross profit and operating income divided by total revenue. Management believes these measures are useful for the following reasons:

   -- 
 Stock-Based Compensation Expense and Related Employer-Paid Payroll 
      Taxes. We provide non-GAAP information that excludes expenses related to 
      stock-based compensation and related employer-paid payroll taxes 
      associated with our employees' participation in N-able's stock-based 
      incentive compensation plans. We believe that the exclusion of 
      stock-based compensation expense provides for a better comparison of our 
      operating results to prior periods and to our peer companies as the 
      calculations of stock-based compensation vary from period to period and 
      company to company due to different valuation methodologies, subjective 
      assumptions and the variety of award types. Employer-paid payroll taxes 
      on stock-based compensation is dependent on our stock price and the 
      timing of the taxable events related to the equity awards, over which our 
      management has little control, and does not necessarily correlate to the 
      core operation of our business. Because of these unique characteristics 
      of stock-based compensation and related employer-paid payroll taxes, 
      management excludes these expenses when analyzing the organization's 
      business performance. 
 
 
   -- 
 Amortization of Acquired Technologies and Intangible Assets. We provide 
      non-GAAP information that excludes expenses related to purchased 
      technologies and intangible assets associated with our acquisitions. We 
      believe that eliminating this expense from our non-GAAP measures is 
      useful to investors because the amortization of acquired technologies and 
      intangible assets can be inconsistent in amount and frequency and is 
      significantly impacted by the timing and magnitude of our acquisition 
      transactions, which also vary in frequency from period to period. 
      Accordingly, we analyze the performance of our operations in each period 
      without regard to such expenses. 
 
 
   -- 
 Transaction Related Costs. We exclude certain expense items resulting 
      from proposed and completed acquisitions, dispositions and similar 
      transactions, such as legal, accounting and advisory fees, changes in 
      fair value of contingent consideration, costs related to integrating the 
      acquired businesses, deferred compensation, severance and retention 
      expense. We consider these adjustments, to some extent, to be 

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