Summary
N-able reported first quarter 2022 total revenue of $90.9 million, up 9.2% from the prior-year quarter. Gross profit was $76.6 million, up 10.7%, and operating income was $11.1 million, up 113.7%. Net income was $5.1 million, a swing to a profit from a prior-year loss, and diluted EPS was $0.03. Gross margin was 84.3%, up 1.1 percentage points, while operating margin was 12.2%, up 6.0 percentage points. Operating cash flow was $13.1 million, flat versus the prior-year quarter. Capital expenditures were $2.7 million, up 11.9%. Deferred revenue and remaining performance obligations both stood at $11.5 million at March 31, 2022. On a non-GAAP basis, gross margin was 85.7%, operating margin was 25.2%, net income was $15.6 million, and diluted EPS was $0.09. Adjusted EBITDA was $27.0 million, or 29.7% of total revenue.
Operational metrics showed steady expansion. The trailing-twelve-month dollar-based net retention rate for subscription products was 108%. MSP partners with annualized recurring revenue over $50,000 grew to 1,733 from 1,511, an increase of 14.7%. Those larger partners represented about 48% of total ARR, up from about 43% a year earlier. N-able had approximately 25,000 customers and 1,426 employees dedicated to the business. Product momentum included a Backup and Disaster Recovery Award from TMC's Cloud Computing Magazine. More than 4,000 partners use the Microsoft 365 backup solution across more than 25,000 customer domains and over 900,000 Exchange mailboxes. The SentinelOne EDR offering protects more than one million customer endpoints. N-able also launched DNS Filtering, a cloud-based content filtering and threat protection service for N-central MSP partners. CRN named six N-able global partner leaders to its 2022 Channel Chiefs list and awarded the company a 5-star rating in its 2022 Partner Program Guide.
Management provided guidance for the second quarter of 2022 and the full year 2022. For the second quarter, total revenue is expected in the range of $91.0 to $91.5 million, representing approximately 7% year-over-year growth, or approximately 13% growth on a constant currency basis. Adjusted EBITDA for the second quarter is expected in the range of $26.0 to $26.5 million, representing approximately 29% of total revenue. For the full year 2022, total revenue is expected in the range of $376 to $379 million, representing 9% year-over-year growth, or 13% to 14% year-over-year growth on a constant currency basis. Full-year adjusted EBITDA is expected in the range of $112.5 to $115.5 million, representing approximately 30% of total revenue. The outlook includes updated expectations of increased foreign exchange headwinds. Management said it is on track to drive revenue acceleration and margin improvement into the back half of 2022 on a constant currency basis.
Risks remain. The company operates as a standalone public company following its spin-off from SolarWinds, and the separation could disrupt the business or fail to achieve anticipated benefits. The COVID-19 pandemic continues to create uncertainty for N-able, its MSP partners, and their SME customers. The SolarWinds cyber incident has caused reputational harm and had an adverse impact on new subscription sales and net retention rates. Management believes the adverse impacts on financial results will diminish over time in the absence of new discoveries or events, but the risk remains. Other risks include inflation, war and political unrest, military conflict between Russia and Ukraine, terrorism, sanctions, foreign exchange headwinds, indebtedness, and the company's status as a controlled company. N-able also faces risks related to attracting and retaining employees, competition, new product introductions, and protecting intellectual property. The first quarter results are preliminary and pending final review by the company and its external auditors.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2022 | Q4 FY2021 | QoQ | Q1 FY2021 | YoY |
|---|---|---|---|---|---|
| Revenue | $90.9M | $89.5M | +1.5% | — | — |
| Gross profit | $76.6M | $76.2M | +0.5% | — | — |
| Gross margin | 84.3% | 85.1% | -0.8 pp | — | — |
| Research & development | $15.4M | $14.8M | +4.2% | — | — |
| Sales & marketing | $31.1M | $32.3M | -3.8% | — | — |
| General & administrative | $17.6M | $19.1M | -7.7% | — | — |
| Total operating expenses | $65.5M | $67.7M | -3.2% | — | — |
| Operating income (loss) | $11.1M | $8.5M | +30.2% | — | — |
| Operating margin | 12.2% | 9.5% | +2.7 pp | — | — |
| Net income (loss) | $5.1M | $2.1M | +148.1% | — | — |
| Net margin | 5.6% | 2.3% | +3.3 pp | — | — |
| Diluted EPS | $0.03 | $0.01 | +$0.02 | — | — |
| Customers | 25,000 | 25,000 | ±0.0% | — | — |
| Net retention rate | 108.0% | — | — | — | — |
Risks
The company has research and development facilities in Belarus, which has experienced civil unrest and government intervention, and engages third-party contractors in Ukraine; the Russia-Ukraine conflict and potential additional sanctions on Belarus could disrupt product development, require shifting R&D to other jurisdictions, and cause delays and additional costs. It generated a de minimis amount of revenue from customers in Russia, Belarus and Ukraine in 2021.
The SolarWinds Cyber Incident caused reputational harm and had an adverse impact on the company's new subscription sales and net retention rates; in 2021 it experienced an adverse impact to new subscription sales and expansion rates relative to historical levels, and it may become subject to lawsuits or investigations related to the incident in the future. The company expects to incur additional expenses for continued security enhancements.
The company operates in Australia, Austria, Belarus, Canada, the Netherlands, the Philippines, Portugal, Romania and the United Kingdom and expects to continue expanding internationally, which increases administrative and compliance costs and exposes it to foreign regulatory, tax, currency, longer sales cycle and trade law risks. Limited experience in certain regions increases the risk that expansion efforts may not be successful.
The company has critical operations and employees in the United Kingdom, including two offices supporting sales, marketing, finance and engineering, and faces risks from Brexit and the Trade and Cooperation Agreement, including exchange rate and interest rate volatility, disruptions to free movement of data, goods, services, people and capital, and potential new regulatory costs.
Global privacy and data protection legislation is rapidly expanding and evolving, and the Schrems II decision invalidated the EU-U.S. Privacy Shield and imposed additional obligations for standard contractual clauses, which may restrict transfers of personal data from the European Union to the United States and increase compliance costs.
The COVID-19 pandemic created significant volatility, uncertainty and disruption in the global economy, particularly for SMEs, and the company experienced a deceleration in year-over-year subscription revenue growth in the second quarter of 2020 due to increased churn and downgrades and slower MSP partner adds. The impact on revenue growth has continued to dissipate through the first quarter of 2022, but the long-term impact remains uncertain.
Following the Separation and Distribution from SolarWinds, the company expects general and administrative expense to increase primarily due to increased costs associated with being a stand-alone public company and costs associated with the Separation and Distribution. Historical carve-out allocations may not be indicative of actual expenses it would have incurred as a stand-alone company.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Non-GAAP Operating Margin
Adjusted EBITDA
Non-GAAP Gross Margin
Total customers
Unlevered Free Cash Flow
MSP partners with ARR over $50,000
Free Cash Flow
MSP partners with over $50,000 ARR as % of total ARR
Summary, forecast, risks and KPIs are extracted from N-able, Inc.'s SEC filings for Q1 FY2022 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 1, 2026.