Summary
N-able reported second quarter fiscal 2024 revenue of $119.4 million, up 12.6% from the prior-year quarter. Year-to-date revenue reached $233.2 million, up 13.3%. The company said growth in data protection, security, and remote monitoring and management solutions, along with a net positive impact from long-term committed contracts, drove the increase. Non-GAAP adjusted EBITDA was $46.8 million, up 34.1%, and adjusted EBITDA margin was 39.2%. Non-GAAP net income was $26.6 million, or $0.14 per diluted share. GAAP net income was $9.5 million, or $0.05 per diluted share, up 109.7% and 150.0% respectively from the prior-year quarter. Operating income was $22.0 million, up 38.8%. Gross margin was 84.0%, flat from a year earlier. Operating margin expanded to 18.4% from 14.9%, an increase of 3.5 percentage points.
The quarter showed operating leverage. GAAP operating income for the first half was $42.5 million, up 40.8%. GAAP net income for the first half was $16.9 million, up 110.1%, and diluted EPS was $0.09, up 125.0%. Gross margin for the first half was 83.9%, flat, while operating margin for the first half was 18.2%, up 3.6 percentage points from 14.6%. Operating cash flow was $27.3 million in the quarter, up 31.6%, but year-to-date operating cash flow was $31.5 million, flat. Capital expenditures were $3.2 million in the quarter, down 9.1%, and $6.7 million year to date, down 4.1%. Deferred revenue was $10.7 million, down 8.4% from the prior-year quarter. Remaining performance obligations were $178.0 million, up 1300.2%, reflecting the long-term contract initiative.
Operational metrics. As of June 30, 2024, N-able had approximately 25,000 customers. It had 2,194 MSP partners with annualized recurring revenue over $50,000, up from 2,162 as of June 30, 2023, an increase of approximately 1.5%. Those partners represented approximately 56% of total ARR, up from approximately 55% a year earlier. Annual dollar-based net revenue retention rate for subscription products was approximately 108% for the trailing twelve months ended June 30, 2024, compared with approximately 105% for the prior-year period. The company highlighted Cove data protection and its security suite, and it signed the CISA Secure by Design Pledge. It also joined with MSPAlliance on Cyber Verify and was named to the MES Midmarket 100 for the second consecutive year.
Guidance and risks. For the third quarter of 2024, management expects year-over-year revenue growth of 6% to 7%, or approximately 7% on a constant currency basis, and adjusted EBITDA of $39.5 million to $40.0 million, approximately 35% of total revenue. For full-year 2024, management expects approximately 10% year-over-year growth on both a reported and constant currency basis, and adjusted EBITDA of $165.5 million to $167.5 million, approximately 36% of total revenue. The company raised the mid-point of its full-year revenue outlook and its full-year adjusted EBITDA margin outlook to 36%. Risks include the spin-off from SolarWinds and related tax and indemnification matters, adverse economic conditions, reduced or delayed IT spending, renewal and net retention pressure, foreign exchange swings, variable-rate debt, and the reputational and business impact of the SolarWinds cyber incident. The balance sheet showed $157.5 million in cash and cash equivalents and $334.1 million in total debt, net of debt issuance costs, as of June 30, 2024.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q2 FY2024 | Q1 FY2024 | QoQ | Q2 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $119.4M | $113.7M | +5.0% | $106.1M | +12.6% |
| Gross profit | $100.3M | $95.5M | +5.1% | $89.1M | +12.6% |
| Gross margin | 84.0% | 83.9% | +0.0 pp | 84.0% | +0.0 pp |
| Research & development | $22.4M | $22.1M | +1.4% | $20.2M | +10.7% |
| Sales & marketing | $32.9M | $35.8M | -8.3% | $34.9M | -5.8% |
| General & administrative | $23.0M | $17.0M | +35.2% | $18.1M | +27.4% |
| Total operating expenses | $78.3M | $75.0M | +4.5% | $73.2M | +6.9% |
| Operating income (loss) | $22.0M | $20.5M | +7.3% | $15.8M | +38.8% |
| Operating margin | 18.4% | 18.0% | +0.4 pp | 14.9% | +3.5 pp |
| Net income (loss) | $9.5M | $7.5M | +26.8% | $4.5M | +109.7% |
| Net margin | 7.9% | 6.5% | +1.4 pp | 4.3% | +3.7 pp |
| Diluted EPS | $0.05 | $0.04 | +$0.01 | $0.02 | +$0.03 |
| Customers | 25,000 | 25,000 | ±0.0% | 25,000 | ±0.0% |
Risks
The SolarWinds Cyber Incident has caused reputational harm and an adverse impact on N-able's reputation, new subscription sales and net retention rates, and the company states it may continue to adversely affect business, results of operations, cash flows or financial position in future periods.
The Long-Term Contract Initiative increased the proportion of long-term committed subscriptions, and the related pricing and packaging changes plus rationalization began pressuring net revenue retention during the three months ended June 30, 2024, even as annual dollar-based net revenue retention was approximately 108% for the trailing twelve months ended June 30, 2024.
Borrowings under the Credit Agreement bear interest at variable rates, and interest expense, net increased by $0.1 million, or 1.0%, for the three months ended June 30, 2024 and by $0.5 million, or 3.4%, for the six months ended June 30, 2024, with changes in interest rates having had and potentially continuing to have an adverse impact on financial results and cash flows.
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 Q2 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.