8-K: N-able Announces Strong Fourth Quarter and Full-Year 2024 Results, Exceeding Revenue Guidance

N-able reports a successful end to 2024, exceeding fourth-quarter revenue guidance with 7% year-over-year growth and providing a positive outlook for 2025.

Summary

• N-able, Inc. announced its fourth quarter and full-year results for 2024.
• Fourth quarter revenue reached $116.5 million, a 7.5% increase year-over-year.
• Subscription revenue for the fourth quarter was $115.0 million, up 8.5% year-over-year.
• GAAP net income for the fourth quarter was $3.3 million, or $0.02 per diluted share.
• Adjusted EBITDA for the fourth quarter was $38.1 million, representing a 32.7% margin.
• Full-year revenue totaled $466.1 million, a 10.5% increase year-over-year.
• Subscription revenue for the full year was $459.0 million, up 11.4% year-over-year.
• Total ARR reached $482.5 million, a 8.6% increase year-over-year.
• GAAP net income for the full year was $31.0 million, or $0.16 per diluted share.
• Adjusted EBITDA for the full year was $169.4 million, representing a 36.3% margin.
• N-able acquired Adlumin, a strategic partner, to enhance its security capabilities.
• The company provided financial outlook for the first quarter and full-year 2025.
• First quarter 2025 revenue is expected to be between $115.0 and $116.0 million, representing 1% to 2% year-over-year growth.
• First quarter 2025 adjusted EBITDA is expected to be between $27.5 and $28.5 million, representing 24% to 25% of total revenue.
• Full-year 2025 ARR is projected to be between $514.0 and $522.0 million, representing 7% to 8% year-over-year growth.
• Full-year 2025 revenue is projected to be between $486.5 and $492.5 million, representing 4% to 6% year-over-year growth.
• Full-year 2025 adjusted EBITDA is projected to be between $132.0 and $138.0 million, representing 27% to 28% of total revenue.

Sentiment

Score: 8

Explanation: The document presents a positive outlook with strong financial results and strategic acquisitions, indicating a favorable sentiment.

Positives

• N-able demonstrated strong financial performance in 2024, exceeding revenue guidance and achieving significant year-over-year growth.
• The acquisition of Adlumin enhances N-able's security capabilities and expands its market reach.
• The company's outlook for 2025 is positive, with projected growth in ARR, revenue, and adjusted EBITDA.
• N-able's high gross margins (80.0% GAAP and 82.3% non-GAAP in Q4) indicate efficient operations.
• The company's adjusted EBITDA margin of 36.3% for the full year demonstrates strong profitability.

Negatives

• The company's projected revenue growth for the first quarter of 2025 is relatively low, at 1% to 2% year-over-year.
• GAAP net income growth was lower than revenue growth, suggesting increasing costs or expenses.
• Total cash and cash equivalents decreased from $153.0 million in 2023 to $85.2 million in 2024.

Risks

• The company's forward-looking statements are subject to various risks and uncertainties, including adverse economic conditions, cyberattacks, and the ability to integrate acquisitions.
• The company's indebtedness could restrict its operations and impact its ability to respond to changing market conditions.
• Foreign exchange rate fluctuations could negatively impact the company's financial results.
• The company's reliance on third-party software and its ability to resell such software could pose a risk to its business.

Future Outlook

N-able expects total revenue in the range of $486.5 to $492.5 million and adjusted EBITDA in the range of $132.0 to $138.0 million for the full-year 2025.

Management Comments

• N-able president and CEO John Pagliuca stated that the company closed 2024 in a position of strength and is poised for even greater success in 2025.
• N-able CFO Tim OBrien added that the company made considerable progress across the business in 2024 and believes it has the right pieces in place to win in its markets.

Industry Context

N-able's focus on security, data protection, and unified endpoint management aligns with the growing demand for comprehensive IT solutions in the face of increasing cyber threats and the need for efficient remote management capabilities.

Comparison to Industry Standards

• Comparing N-able's growth to peers like ConnectWise and Datto (prior to its acquisition by Kaseya), N-able's revenue growth of 10.5% is competitive.
• N-able's adjusted EBITDA margin of 36.3% is strong compared to industry averages, suggesting efficient cost management.
• The acquisition of Adlumin is similar to moves by competitors to expand their security offerings, such as Kaseya's acquisition of RocketCyber.

Management Changes

Stakeholder Impact

• Shareholders can expect continued growth and profitability based on the company's financial performance and outlook.
• Employees may benefit from the company's expansion and strategic initiatives.
• Customers can anticipate enhanced security and IT management solutions through the acquisition of Adlumin.
• Suppliers and partners can expect continued collaboration and opportunities for growth.

Next Steps

• N-able will host a conference call to discuss its financial results, business, and business outlook.
• N-able anticipates filing its Annual Report on Form 10-K for the year ended December 31, 2024, on or about March 3, 2025.

Key Dates