Summary
N-able's first quarter of fiscal 2025 showed top-line growth but a sharp GAAP profitability decline. Revenue rose 3.9% to $118.2 million. Gross profit fell 5.2% to $90.5 million. Operating income dropped 91.1% to $1.8 million. The company swung to a net loss of $7.2 million. Diluted EPS swung to a loss of $0.04. Gross margin fell 7.3 percentage points to 76.6%. Operating margin fell 16.5 percentage points to 1.5%. On a non-GAAP basis, adjusted EBITDA was $31.6 million, a 26.8% margin. Non-GAAP net income was $15.6 million, or $0.08 per diluted share. Non-GAAP gross margin was 80.6%. The wide gap between GAAP and non-GAAP results reflects amortization of acquired technologies and intangibles, stock-based compensation, transaction related costs, and other items.
Cash generation improved. Operating cash flow rose 370.3% to $19.7 million. Capital expenditures were $3.3 million, down 4.4%. Free cash flow was $13.6 million. Unlevered free cash flow was $28.1 million. Deferred revenue rose 101.6% to $26.4 million. Remaining performance obligations rose 135.8% to $201.7 million. The board authorized a share repurchase program of up to $75 million. These figures suggest improving cash conversion and a larger contracted backlog.
Operational metrics were mixed. Total ARR was $492.7 million, up 10.3% year over year, or 10.9% on a constant currency basis. Customers with ARR over $50,000 reached 2,398, up from 2,187, a 9.6% increase. Those customers represented approximately 58% of total ARR, up from approximately 56%. However, the annual dollar-based net revenue retention rate for subscription products was approximately 101%, down from 111%. Management attributed the pressure to pricing and packaging changes and rationalization from the Long-Term Contract Initiative. The company also completed the Adlumin acquisition in November 2024, which added amortization and transaction costs.
Guidance points to continued growth. For the second quarter of 2025, management expects revenue in the range of $125.5 million to $126.5 million, representing approximately 5% to 6% year-over-year growth on a reported and constant currency basis. Adjusted EBITDA is guided to $34.0 million to $35.0 million, or approximately 27% to 28% of revenue. For full-year 2025, management expects total ARR of $519 million to $525 million, up 8% to 9% year over year, or approximately 7% to 9% on a constant currency basis. Full-year 2025 revenue is guided to a range of $492 million to $497 million, up approximately 6% to 7% year over year, or approximately 6% to 8% on a constant currency basis. Adjusted EBITDA is guided to $134 million to $139 million, or approximately 27% to 28% of revenue. The company raised the midpoint of its full-year 2025 revenue outlook from $489.5 million to $494.5 million.
Risks remain. Management cited adverse economic conditions, reduced or delayed information technology spending, foreign exchange fluctuations, and geopolitical conflict. The company also flagged risks from cyberattacks, its status as a controlled company, indebtedness, and the integration of acquisitions. Stock-based compensation expense increased in the quarter and is expected to continue increasing during 2025. The GAAP outlook is not reconciled to non-GAAP guidance because of uncertainty around excluded items. The quarter showed solid ARR growth and cash flow, but GAAP earnings turned negative and net revenue retention weakened. The company's ability to convert its backlog and ARR growth into GAAP profitability will be a key focus.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q1 FY2025 | Q4 FY2024 | QoQ | Q1 FY2024 | YoY |
|---|---|---|---|---|---|
| Revenue | $118.2M | $116.5M | +1.4% | $113.7M | +3.9% |
| Gross profit | $90.5M | $93.2M | -2.9% | $95.5M | -5.2% |
| Gross margin | 76.6% | 80.0% | -3.4 pp | 83.9% | -7.3 pp |
| Research & development | $23.9M | $23.2M | +2.7% | $22.1M | +8.2% |
| Sales & marketing | $40.4M | $34.6M | +16.7% | $35.8M | +12.8% |
| General & administrative | $23.9M | $19.1M | +25.3% | $17.0M | +40.2% |
| Total operating expenses | $88.7M | $77.2M | +14.9% | $75.0M | +18.3% |
| Operating income (loss) | $1.8M | $16.0M | -88.6% | $20.5M | -91.1% |
| Operating margin | 1.5% | 13.7% | -12.2 pp | 18.0% | -16.5 pp |
| Net income (loss) | -$7.2M | $3.3M | -317.7% | $7.5M | -196.1% |
| Net margin | -6.1% | 2.8% | -8.9 pp | 6.5% | -12.6 pp |
| Diluted EPS | -$0.04 | $0.02 | -$0.06 | $0.04 | -$0.08 |
| Customers | 2,398 | 2,349 | +2.1% | 25,000 | -90.4% |
| Net retention rate | 85.0% | — | — | 110.0% | -25.0 pp |
Risks
Annual dollar-based net revenue retention rate for subscription products declined to approximately 101% for the trailing twelve-month period ended March 31, 2025 from approximately 111% for the trailing twelve-month period ended March 31, 2024. The company attributes the decline to pressure from pricing and packaging changes and rationalization related to its Long-Term Contract Initiative, which began materially impacting net revenue retention during the three months ended June 30, 2024.
Revenue was up 3.9% to $118.2 million for the quarter ended March 31, 2025, but gross margin was down 7.3 percentage points to 76.6% and operating margin was down 16.5 percentage points to 1.5%. Net income swung to a net loss of $7.2 million from net income of $7.5 million in the prior-year quarter, with operating income down 91.1% to $1.8 million, driven by higher cost of revenue, sales and marketing, research and development, and general and administrative expenses.
The November 20, 2024 acquisition of Adlumin contributed to ARR growth but also drove increases in amortization of acquired technologies, general and administrative expense from the Adlumin deferred consideration liability and contingent consideration, and transaction related costs. ARR increased 10.3% to $492.7 million as of March 31, 2025 from $446.6 million as of March 31, 2024, partly due to the acquisition, creating integration and valuation risk.
Stock-based compensation expense and related employer-paid payroll taxes were $12.7 million for the quarter ended March 31, 2025, and the company expects stock-based compensation expense to continue to increase during the year ending December 31, 2025. This pressure may weigh on GAAP profitability even as non-GAAP operating income declined to $25.3 million from $33.2 million.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Non-GAAP Operating Margin
Adjusted EBITDA
Non-GAAP Gross Margin
Unlevered Free Cash Flow
Free Cash Flow
Customers with ARR over $50,000
Total ARR
Summary, forecast, risks and KPIs are extracted from N-able, Inc.'s SEC filings for Q1 FY2025 (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 2, 2026.