Summary
N-able ended fiscal 2023 with fourth-quarter revenue of $108.4 million, up 13.2% from the prior-year quarter. Gross margin slipped to 83.7% from 84.3%, while operating income rose 52.4% to $21.8 million. Net income was $9.4 million, up 33.9% year over year. Operating margin expanded to 20.1% from 14.9%. Adjusted EBITDA, a non-GAAP measure, reached $39.2 million, up 25.7%, for a 36.2% margin. Non-GAAP net income was $19.8 million, or $0.11 per diluted share. The company also generated $31.2 million of operating cash flow, up 69.7%, and spent $3.3 million on capital expenditures, up 4.7%.
Full-year results followed a similar pattern. Revenue for fiscal 2023 was $421.9 million, up 13.5%. Gross margin was 83.8%, down from 84.2%. Operating income climbed 48.4% to $70.3 million, and net income rose 40.1% to $23.4 million. Diluted earnings per share were $0.13, up from $0.09. Operating margin for the year was 16.7%, up from 12.7%. Operating cash flow for the full year was $90.1 million, up 26.2%, and capital expenditures were $13.8 million, up 7.4%. Adjusted EBITDA for the year was $143.4 million, up 25.0%, for a 34.0% margin. Non-GAAP net income was $68.2 million, or $0.37 per diluted share.
The quarter's operational metrics point to durable expansion with MSP partners. The trailing-twelve-month dollar-based net retention rate was 110%. MSP partners with more than $50,000 of annualized recurring revenue totaled 2,196, up from 1,898, an increase of approximately 16%. Those larger partners represented about 56% of total ARR, up from about 51%. N-able had approximately 25,000 customers as of December 31, 2023. Product activity included the launch of N-able Managed Detection and Response, the addition of Cloud Commander, and new generative AI capabilities for device management. The company also received a 2023 ChannelPro SMB All-Star Award. Deferred revenue was $12.8 million, up 5.7%, and remaining performance obligations were $21.1 million, up 67.2%.
Management guided the first-quarter 2024 top line to $111.0 million to $111.5 million, representing approximately 11% to 12% year-over-year growth on both a reported and constant currency basis. First-quarter adjusted EBITDA guidance is $37.5 million to $38.0 million, or approximately 34% of total revenue. For full-year 2024, the top-line outlook is $460.0 million to $465.0 million, representing approximately 9% to 10% year-over-year growth, or 9% to 11% on a constant currency basis. Full-year adjusted EBITDA guidance is $158.0 million to $162.0 million, representing approximately 34% to 35% of total revenue. The guidance is non-GAAP and excludes items such as amortization, depreciation, income tax expense, interest expense, foreign currency gains and losses, acquisition costs, spin-off costs, stock-based compensation, and restructuring costs. Management said the 2024 plan aims for a sustained Rule of 50 performance goal. Risks include macroeconomic pressure on information technology spending, foreign exchange swings, rising interest rates on variable-rate debt, reputational harm from the SolarWinds cyber incident, the company's status as a controlled company, and execution on new products and acquisitions. The company continues to face competition and the need to add MSP partners and expand within existing ones.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2023 | Q3 FY2023 | QoQ | Q4 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $108.4M | $107.6M | +0.8% | $95.8M | +13.2% |
| Gross profit | $90.8M | $90.2M | +0.6% | $80.7M | +12.5% |
| Gross margin | 83.8% | 83.9% | -0.1 pp | 84.3% | -0.5 pp |
| Research & development | $19.4M | $19.8M | -1.9% | $16.8M | +15.2% |
| Sales & marketing | $33.6M | $33.7M | -0.2% | $31.1M | +8.0% |
| General & administrative | $16.0M | $18.4M | -13.2% | $17.0M | -5.9% |
| Total operating expenses | $69.0M | $71.9M | -4.0% | $66.4M | +3.9% |
| Operating income (loss) | $21.8M | $18.4M | +18.9% | $14.3M | +52.4% |
| Operating margin | 20.1% | 17.1% | +3.1 pp | 14.9% | +5.2 pp |
| Net income (loss) | $9.4M | $6.0M | +55.5% | $7.0M | +33.9% |
| Net margin | 8.6% | 5.6% | +3.0 pp | 7.3% | +1.3 pp |
| Diluted EPS | $0.05 | $0.03 | +$0.02 | $0.09 | -$0.04 |
| Customers | 25,000 | 25,000 | ±0.0% | 25,000 | ±0.0% |
Risks
The SolarWinds Cyber Incident has caused reputational harm and adverse impacts on new subscription sales and net retention rates. In October 2023, the SEC filed a complaint against SolarWinds and its chief information officer relating to cybersecurity disclosures, bringing renewed attention and questions from some MSP partners.
N-able operates in a highly competitive MSP market against vendors such as Kaseya, ConnectWise, NinjaOne, Auvik, Acronis and Veeam. Competitors may bundle solutions, sell at zero or negative margins, or offer concessions, which could pressure pricing, net customer retention, revenue and gross margins.
Revenue from customers outside the United States represented 51.2% of total revenue for fiscal year 2023, and approximately 79% of employees were located outside the United States as of December 31, 2023. Research and development facilities in Belarus and contractors in Ukraine expose N-able to civil unrest, sanctions, export controls and potential delays or costs if activities must shift to other jurisdictions.
N-able has substantial indebtedness under its Credit Agreement with variable-rate borrowings, which could adversely affect financial health and the ability to obtain financing or react to business changes. Rising interest rates have increased interest costs and could continue to pressure cash flows.
Revenue growth depends on recruiting, training, managing and retaining sufficient sales personnel and converting qualified opportunities through a low-touch, high-velocity sales model. New hires may not become productive as quickly as expected, particularly in international markets.
A portion of revenue is consumption-based, especially for remote monitoring and management and Cove backup, recovery and disaster recovery solutions, and is recognized as services are delivered. MSP partners control the timing of consumption, reducing visibility and risking results below internal or external expectations.
N-able ceased to be an emerging growth company as of December 31, 2023, so its independent registered public accounting firm is now required to attest to the effectiveness of internal controls. Failure to maintain proper and effective internal controls could impair the ability to produce accurate and timely financial statements.
The Sponsors collectively owned approximately 60.9% of the voting power of N-able common stock as of December 31, 2023 and can exert significant influence over stockholder matters. As a controlled company, N-able may rely on NYSE exemptions from certain corporate governance requirements, reducing some stockholder protections.
N-able has made several acquisitions and may pursue larger acquisitions, which involve risks such as integration difficulties, diversion of management attention, failure to maintain key relationships, impairment charges, additional debt and stockholder dilution.
Economic weakness, tightened credit markets and constrained IT spending may reduce demand and increase price competition for N-able offerings. Uncertainty about future economic conditions may negatively impact MSP partners and their SME customers, causing delays or reductions in technology purchases.
SaaS KPIs
All quarters →Adjusted EBITDA Margin
Non-GAAP Operating Margin
Adjusted EBITDA
Non-GAAP Gross Margin
Total customers
Unlevered Free Cash Flow
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 Q4 FY2023 (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.