Summary
N-able provides cloud-based security, data protection, and unified endpoint management software for IT services providers, including managed service providers. Its platform helps these providers support digital transformation for small and medium-sized businesses. N-able closed fiscal 2024 with fourth-quarter revenue up 7.2% to $116.2 million. Gross profit for the quarter was $92.8 million, up 2.2%. Operating income fell 26.7% to $16.0 million. Net income dropped 64.0% to $3.4 million. The quarter's gross margin was 79.9%, down 3.9 percentage points. Operating margin was 13.8%, down 6.4 percentage points. Those declines show cost pressure even as revenue grew.
Full-year revenue rose 10.5% to $466.1 million. Full-year operating income rose 17.1% to $82.4 million. Full-year net income rose 32.2% to $31.0 million. Full-year diluted EPS rose 23.1% to $0.16. Full-year gross margin was 82.7%, down 1.1 percentage points. Full-year operating margin was 17.7%, up 1.0 percentage point. The full-year figures show stronger profitability than the fourth quarter alone. The company's revenue growth was driven by demand for its data protection, security, and unified endpoint management solutions.
Operating cash flow for the quarter fell 16.8% to $26.0 million. Full-year operating cash flow fell 11.8% to $79.4 million. Capital expenditures rose 117.1% to $7.2 million in the quarter and 27.5% to $17.6 million for the full year. Deferred revenue rose 110.5% to $27.0 million. Remaining performance obligations rose 840.7% to $198.1 million. The large increase in deferred revenue and RPO reflects the company's Long-Term Contract Initiative, which began in 2024 and increased the proportion of long-term committed contracts. Adjusted EBITDA was $38.1 million for the quarter. For the full year, adjusted EBITDA was $169.4 million and adjusted EBITDA margin was 36.3%. Non-GAAP operating margin was 30.6% for the full year. The company's cash flow from operations is its primary source of cash for funding operations and growth.
Annual recurring revenue was $482.5 million as of December 31, 2024, up 8.6% from $444.3 million as of December 31, 2023. Customers with ARR over $50,000 rose to 2,349 from 2,196, an increase of approximately 7%. Those customers represented approximately 57% of total ARR, up from approximately 56%. The annual dollar-based net revenue retention rate for subscription products was approximately 103% for 2024, down from 110% for 2023. The company attributed the lower retention rate to pricing and packaging changes and rationalization related to the Long-Term Contract Initiative. On November 20, 2024, N-able acquired Adlumin, an enterprise-grade security operations platform provider, to add extended detection and response and managed detection and response capabilities. The acquisition was structured as a merger, and Adlumin became an indirect wholly owned subsidiary. The results of Adlumin since the acquisition date are included in the consolidated financial statements for the three and twelve months ended December 31, 2024. The company had 1,773 employees as of December 31, 2024, up from 1,584 as of December 31, 2023. The company's land and expand model and global presence have driven recurring revenue growth.
Management expects stock-based compensation expense to continue to increase during the year ending December 31, 2025. It also expects to grow its sales and marketing, research and development, and general and administrative organizations over time. The company expects additional expenses related to continued enhancements to its security measures across its solutions. It also expects to incur additional expenses associated with bringing new product offerings to market. The filing lists several risks. The SolarWinds Cyber Incident caused reputational harm and had an adverse impact on new subscription sales and net retention rates. The company says the adverse impacts have diminished, but the incident may continue to affect the business. Interest rate risk remains because borrowings under the Credit Agreement bear interest at variable rates. Foreign currency fluctuations can affect reported revenue, expenses, and cash flows. Goodwill impairment is another risk, though the annual qualitative assessment on October 1, 2024 found no indicators of impairment. Acquisition integration and contingent consideration revaluation could also affect results. The Long-Term Contract Initiative may continue to pressure net revenue retention. The company believes its existing liquidity and cash flows from operating activities will be sufficient to fund operations and meet capital expenditure commitments for at least the next twelve months.
Forecast
No forward guidance in this quarter's filings.
Reported figures
GAAP, from SEC filings| Metric | Q4 FY2024 | Q3 FY2024 | QoQ | Q4 FY2023 | YoY |
|---|---|---|---|---|---|
| Revenue | $116.5M | $116.4M | +0.1% | $108.4M | +7.5% |
| Gross profit | $93.2M | $96.5M | -3.5% | $90.8M | +2.6% |
| Gross margin | 80.0% | 82.9% | -2.9 pp | 83.8% | -3.8 pp |
| Research & development | $23.2M | $23.0M | +1.1% | $19.4M | +19.9% |
| Sales & marketing | $34.6M | $32.3M | +7.2% | $33.6M | +3.1% |
| General & administrative | $19.1M | $17.3M | +10.1% | $16.0M | +19.2% |
| Total operating expenses | $77.2M | $72.6M | +6.3% | $69.0M | +11.9% |
| Operating income (loss) | $16.0M | $23.9M | -33.1% | $21.8M | -26.7% |
| Operating margin | 13.7% | 20.5% | -6.8 pp | 20.1% | -6.4 pp |
| Net income (loss) | $3.3M | $10.8M | -69.4% | $9.4M | -64.8% |
| Net margin | 2.8% | 9.2% | -6.4 pp | 8.6% | -5.8 pp |
| Diluted EPS | $0.02 | $0.06 | -$0.04 | $0.05 | -$0.03 |
| Customers | 2,349 | 25,000 | -90.6% | 25,000 | -90.6% |
Risks
The 2020 SolarWinds Orion Cyber Incident caused reputational harm and had an adverse impact on N-able's new subscription sales and net retention rates; the filing states the incident may continue to adversely affect business, results of operations, cash flows or financial position, and N-able continues to incur security enhancement expenses.
The Long-Term Contract Initiative increased long-term committed subscriptions, contributing to deferred revenue up 110.5% to $26.97M and RPO up 840.7% to $198.07M versus the prior-year quarter, while point in time subscription revenue decreased to $10.8M in Q4 2024 from $14.7M in Q4 2023; this reduces near-term visibility and pressures net revenue retention, which declined to approximately 103% for FY2024 from 110% for FY2023.
N-able has substantial indebtedness with total borrowings of $333.1M as of December 31, 2024, net of debt issuance costs, and committed cash interest payments of approximately $90.1M over the Credit Agreement term; variable rates expose it to interest rate risk, and interest expense, net was $30.0M for FY2024.
International operations generated 51.8% of FY2024 revenue, about 75% of employees are outside the U.S., and R&D facilities in Belarus plus contractors in Ukraine expose N-able to sanctions, civil unrest, and Russia-Ukraine conflict disruptions that could require shifting development and increase costs.
Material defects, errors, or vulnerabilities in N-able solutions, including failure to block malware or prevent a security breach, could harm reputation, result in significant costs, and impair sales; the filing notes frequent updates may fail and create temporary vulnerabilities.
The November 20, 2024 Adlumin acquisition involved $98.7M cash, stock issuance, $120.0M in deferred cash installments, and up to $30.0M in earn-outs; integration risks include diversion of management, failure to retain key employees, and contingent consideration revaluation, with a $2.6M gain recognized in FY2024.
N-able operates in highly competitive markets against vendors such as Kaseya, ConnectWise, NinjaOne, Acronis, ArcticWolf, eSentire, ManageEngine, Proofpoint, Sophos and Veeam, some with greater resources and broader offerings, which could lead to price reductions, lower net retention, reduced revenue and gross margins, and loss of market share.
Growth depends on recruiting, training and retaining sufficient sales personnel, particularly internationally; the filing notes significant competition for sales personnel with required skills and that recent and planned hires may not become productive as quickly as expected.
N-able relies on third-party software it resells or integrates, and on hyperscalers such as AWS and Azure plus internal systems like NetSuite and Salesforce; termination, errors, or service disruptions could impair solution delivery, financial reporting, and customer service.
N-able is subject to global data privacy and security regulations plus export controls and economic sanctions laws; compliance could result in additional costs and liabilities and impair international competitiveness.
As a former emerging growth company, N-able must have its independent registered public accounting firm attest to internal controls, and acquisitions such as Adlumin require assessing and integrating acquired controls; failure could impair accurate and timely financial statements.
Silver Lake and Thoma Bravo collectively owned approximately 111,564,512 shares, or about 59.5% of voting power as of December 31, 2024, giving them controlling influence over board composition, mergers, capital raising, and charter amendments, with potential conflicts of interest.
Goodwill from the 2016 SolarWinds take private and subsequent acquisitions is tested annually; while the October 1, 2024 qualitative assessment found no impairment indicators, changes in estimates or assumptions could result in a non-cash impairment charge material to financial results.
N-able transacts in foreign currencies and does not currently hedge transactional exposures; changes in foreign currency rates affect revenue and operating results, and other income, net decreased $2.3M or 54.7% for FY2024 primarily due to a $3.8M decrease in foreign currency exchange rate impact.
Operating cash flow decreased 11.8% to $79.44M for FY2024 from $90.09M for FY2023, and the filing notes operating expenses have increased and may continue to increase; failure to sustain cash flows could halt expansion or strategic combinations.
Economic weakness, tightened credit markets, and constrained IT spending could reduce demand and increase price competition for N-able's offerings, and uncertainty may cause IT services provider customers' SMB and mid-market customers to delay or reduce technology purchases.
SaaS KPIs
All quarters →Customers with ARR over $50,000
Summary, forecast, risks and KPIs are extracted from N-able, Inc.'s SEC filings for Q4 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.