8-K: N-able Announces Q1 2025 Results, Raises Full-Year Revenue Outlook

N-able reports strong Q1 2025 results, exceeding revenue and adjusted EBITDA guidance, and raises its full-year revenue outlook.

Summary

• N-able announced its first quarter 2025 financial results on May 8, 2025.
• Total revenue for Q1 2025 was $118.2 million, a 3.9% year-over-year increase, or 5.7% on a constant currency basis.
• Subscription revenue reached $116.8 million, up 4.8% year-over-year, or 6.6% on a constant currency basis.
• Total ARR (Annual Recurring Revenue) was $492.7 million, representing a 10.3% year-over-year increase, or 10.9% on a constant currency basis.
• GAAP gross margin was 76.6%, while non-GAAP gross margin was 80.6%.
• The company reported a GAAP net loss of $7.2 million, or $(0.04) per diluted share, and a non-GAAP net income of $15.6 million, or $0.08 per diluted share.
• Adjusted EBITDA was $31.6 million, with an adjusted EBITDA margin of 26.8%.
• N-able raised its full-year 2025 revenue outlook midpoint from $489.5 million to $494.5 million.
• For the second quarter of 2025, N-able expects total revenue in the range of $125.5 to $126.5 million and adjusted EBITDA in the range of $34.0 to $35.0 million.
• For the full year 2025, N-able expects total ARR in the range of $519 to $525 million, total revenue in the range of $492 to $497 million, and adjusted EBITDA in the range of $134 to $139 million.
• As of March 31, 2025, total cash and cash equivalents were $94.1 million, and total debt, net of debt issuance costs, was $332.6 million.
• The Board of Directors approved a share repurchase program authorizing the company to repurchase up to $75 million of its common stock.

Sentiment

Score: 7

Explanation: The document presents a generally positive outlook with strong ARR growth and raised revenue guidance, although the GAAP net loss and debt levels temper the overall sentiment.

Positives

• N-able exceeded its first quarter revenue and adjusted EBITDA guidance.
• The company experienced strong ARR growth of approximately 11% year-over-year on a constant currency basis.
• N-able is innovating and growing, as evidenced by the launch of new security capabilities and the addition of channel partners.
• The company secured its largest new bookings deal ever.
• N-able is focused on maintaining momentum and delivering strong profit while driving ARR growth.
• The company's balance sheet shows $94.1 million in cash and cash equivalents.
• The share repurchase program indicates confidence in the company's financial position and future prospects.

Negatives

• N-able reported a GAAP net loss of $7.2 million for the first quarter of 2025.
• Total revenue growth of 3.9% year-over-year is lower than the ARR growth rate.
• The company has a significant amount of debt, totaling $332.6 million.

Risks

• Adverse economic conditions could impact information technology spending.
• The company's ability to sell subscriptions to new customers and increase usage by existing customers is crucial for growth.
• Declines in renewal or net retention rates could negatively impact financial performance.
• Cyberattacks and security incidents could compromise systems and data, leading to financial and reputational damage.
• The company's indebtedness could restrict operations and impact financial flexibility.
• Risks related to the spin-off from SolarWinds could affect the business.

Future Outlook

N-able expects Q2 2025 revenue between $125.5 and $126.5 million and adjusted EBITDA between $34.0 and $35.0 million. For full-year 2025, they anticipate ARR between $519 and $525 million, revenue between $492 and $497 million, and adjusted EBITDA between $134 and $139 million.

Management Comments

• N-able president and CEO John Pagliuca stated that the earnings reflect continued progress advancing cyber-resiliency for businesses worldwide.
• N-able CFO Tim O'Brien added that the company had a solid start to the year, with first quarter revenue and adjusted EBITDA both coming in above the high end of their guidance range.

Industry Context

N-able's focus on cyber resiliency and managed services aligns with the growing demand for cybersecurity solutions among small and medium-sized businesses. The company's expansion of its Microsoft Cloud management and security capabilities positions it to capitalize on the increasing adoption of cloud services.

Comparison to Industry Standards

• Comparing N-able to peers like ConnectWise and Kaseya, which also provide software solutions for MSPs, N-able's ARR growth of 10.3% is competitive.
• Companies like CrowdStrike and SentinelOne, which focus on endpoint security, have seen higher growth rates, but N-able's broader platform approach may appeal to a different segment of the market.
• N-able's adjusted EBITDA margin of 26.8% is within the typical range for software companies, but there is room for improvement compared to industry leaders with margins above 30%.

Stakeholder Impact

• Shareholders will likely react positively to the raised revenue outlook and share repurchase program.
• Employees may be motivated by the company's growth and innovation.
• Customers will benefit from the new security capabilities and platform enhancements.
• Suppliers and creditors can expect continued business and timely payments.

Next Steps

• N-able will host a conference call on May 8, 2025, to discuss its financial results and business outlook.
• The company will continue to focus on driving ARR growth and delivering strong profit.
• N-able will launch its Vulnerability Management feature for its UEM products.

Key Dates

Keywords

N-able, financial results, ARR, revenue, EBITDA, cybersecurity, managed services, software, share repurchase, outlook