Summary
N-able reported first-quarter 2024 revenue of $113.7 million, up 14.0% from the prior-year quarter. Gross profit was $95.5 million, up 14.2%, and gross margin was 83.9%, up 0.2 pp. Operating income was $20.5 million, up 43.1%, and operating margin was 18.0%, up 3.7 pp. Net income was $7.5 million, up 110.7%, and diluted EPS was $0.04, up $0.02. On a non-GAAP basis, adjusted EBITDA was $39.6 million, up 21.0%, with an adjusted EBITDA margin of 34.8%. Non-GAAP net income was $19.8 million, or $0.11 per diluted share, and non-GAAP gross margin was 84.7%.
Cash generation was weaker. Operating cash flow was $4.2 million, down 60.6% from the prior-year quarter. Capital expenditures were $3.4 million, up 1.0%. Deferred revenue was $13.1 million, up 3.7%. Remaining performance obligations were $85.5 million, up 542.2%. The company ended the quarter with approximately 25,000 customers. It had 2,187 MSP partners with annualized recurring revenue over $50,000, up from 1,936 as of March 31, 2023, an increase of approximately 13%. Those larger partners grew from approximately 52% of total ARR as of March 31, 2023 to approximately 56% as of March 31, 2024. The annual dollar-based net revenue retention rate for subscription products was approximately 111% for the trailing twelve months ended March 31, 2024, compared with approximately 103% for the prior-year period. N-able employed 1,598 people as of March 31, 2024.
Management highlighted product and partner initiatives. N-able showcased its Ecoverse vision at its Empower customer conference. It announced Cove's Master of Disaster Recovery Class, a free online session for MSPs. The company received a 5-Star Award in CRN's 2024 Partner Program Guide and an Advancing Diversity in Technology Leadership Award from CompTIA. These efforts support the multi-product platform strategy.
Guidance points to continued growth. For the second quarter of 2024, management expects revenue growth of approximately 10% year-over-year, or 10% to 11% growth on a constant currency basis. Second-quarter adjusted EBITDA is expected to be $41.0 million to $41.5 million, approximately 35% of revenue. For full-year 2024, management expects revenue growth of approximately 10% year-over-year, or 10% to 11% growth on a constant currency basis. Full-year adjusted EBITDA is expected to be $162.0 million to $165.0 million, approximately 35% of revenue. The company raised its full-year 2024 constant currency revenue outlook to 10% to 11% and its full-year 2024 adjusted EBITDA margin outlook to 35%.
Risks remain. The company faces risks related to its spin-off from SolarWinds, including that the distribution may not qualify as tax-free. Other risks include adverse economic conditions, the ability to sell subscriptions to new and existing MSP partners, declines in renewal or net retention rates, and reduced or delayed IT spending due to inflation, interest rates, or geopolitical conflict. The SolarWinds cyber incident has caused reputational harm and had an adverse impact on new subscription sales and net retention rates, though management believes the impact has diminished. N-able also has indebtedness with variable interest rates, which can affect interest expense and cash flows. Foreign exchange movements can affect reported revenue and expenses.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2024 | Q4 FY2023 | QoQ | Q1 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $113.7M | $108.4M | +4.9% | $99.8M | +14.0% |
| Gross profit | $95.5M | $90.8M | +5.1% | $83.6M | +14.2% |
| Gross margin | 83.9% | 83.8% | +0.2 pp | 83.8% | +0.1 pp |
| Research & development | $22.1M | $19.4M | +13.9% | $18.8M | +17.4% |
| Sales & marketing | $35.8M | $33.6M | +6.7% | $32.6M | +10.0% |
| General & administrative | $17.0M | $16.0M | +6.5% | $17.3M | -1.7% |
| Total operating expenses | $75.0M | $69.0M | +8.7% | $69.3M | +8.2% |
| Operating income (loss) | $20.5M | $21.8M | -6.1% | $14.3M | +43.1% |
| Operating margin | 18.0% | 20.1% | -2.1 pp | 14.3% | +3.7 pp |
| Net income (loss) | $7.5M | $9.4M | -20.3% | $3.5M | +110.7% |
| Net margin | 6.5% | 8.6% | -2.1 pp | 3.5% | +3.0 pp |
| Diluted EPS | $0.04 | $0.05 | -$0.01 | $0.02 | +$0.02 |
| Customers | 25,000 | 25,000 | ±0.0% | 25,000 | ±0.0% |
| Net retention rate | 110.0% | — | — | 103.0% | +7.0 pp |
Risks
The SolarWinds Cyber Incident has had an adverse impact on N-able's reputation, new subscription sales and net retention rates, and the company states there is risk it may continue to adversely affect the business in future periods. N-able also expects to incur additional expenses in future periods for continued security enhancements across its solutions.
Borrowings under the Credit Agreement bear interest at variable rates, and interest expense, net increased by $0.4 million, or 5.8%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023. Changes in interest rates have had and could continue to have an adverse impact on financial results and cash flows.
As a global company, N-able faces exposure to adverse movements in foreign currency exchange rates that impact reported assets, liabilities, revenue, operating expenses and cash flows. Other income, net decreased by $0.7 million, or 71.2%, in the three months ended March 31, 2024 compared to the three months ended March 31, 2023, primarily due to a decrease in the impact of changes in foreign currency exchange rates of $1.5 million.
N-able's effective tax rate was 43.3% for the three months ended March 31, 2024, and the company states its effective tax rate will be affected by changes in tax laws, regulations or rates, new interpretations of existing laws or regulations, valuation allowances, uncertain tax positions and shifts in the allocation of income earned throughout the world.
Operating cash flow decreased 60.6% to $4.2 million in the three months ended March 31, 2024 from $10.6 million in the three months ended March 31, 2023. The company attributes the decrease primarily to working capital changes and notes cash flows from operations were reduced by cash payments for interest of $7.3 million in the current quarter.
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 FY2024 (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.