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N-able, Inc. (NABL)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 delivered a top- and bottom-line beat: revenue $118.2m and adjusted EBITDA $31.6m both exceeded the high end of guidance; non-GAAP EPS was $0.08. Management raised FY 2025 revenue, ARR, and adjusted EBITDA guidance midpoints, citing stronger execution and updated FX .
  • Versus consensus, revenue beat by ~$2.65m (+2.3%) and non-GAAP EPS beat by ~$0.022; CFO noted ~$2m FX tailwind and a modest positive ASC 606 impact in Q1 that won’t carry through the year .
  • Margins compressed vs Q4 due to higher amortization, transaction-related costs and integration investment (adj. EBITDA margin 26.8% vs 32.7% in Q4; GAAP net loss of $7.2m) .
  • Strategic highlights: launch of Vulnerability Management inside UEM, Microsoft 365 Breach Prevention, reseller-channel expansion, and “largest new bookings deal ever”; Board authorized a $75m share repurchase program .

What Went Well and What Went Wrong

What Went Well

  • Exceeded revenue and adjusted EBITDA guidance; management raised full-year midpoints (revenue, ARR, adjusted EBITDA), reflecting execution and FX updates .
  • Product momentum: launched Vulnerability Management in UEM and Microsoft 365 Breach Prevention; “We are automating 70% of incident and threat remediation activities across thousands of end customers” (AI-powered SOC) .
  • Go-to-market expansion gaining traction: added resellers globally and recorded “our largest new bookings deal ever,” underpinning cross-sell and channel strategies .

What Went Wrong

  • Margin compression and GAAP loss: adj. EBITDA margin fell to 26.8% (from 32.7% in Q4) and GAAP net loss of $7.2m vs Q4 GAAP net income; operating income declined to $1.8m from $16.0m in Q4, reflecting amortization and transaction costs .
  • Non-GAAP gross margin stepped down to 80.6% from 82.3% in Q4; GAAP gross margin to 76.6% from 80.0% .
  • Net revenue retention slowed to ~101% (TTM) vs 103% in Q4; CFO indicated it likely bottomed in Q1 and should improve through 2025, driven by cross-sell and pricing (1–2%) .

Financial Results

Core P&L and Margins

MetricQ3 2024Q4 2024Q1 2025
Revenue ($USD Millions)$116.442 $116.509 $118.197
Non-GAAP Diluted EPS ($USD)$0.13 $0.10 $0.08
Adjusted EBITDA ($USD Millions)$44.832 $38.144 $31.643
GAAP Gross Margin %82.9% 80.0% 76.6%
Non-GAAP Gross Margin %83.7% 82.3% 80.6%
Adjusted EBITDA Margin %38.5% 32.7% 26.8%

Subscription vs Other Revenue

MetricQ3 2024Q4 2024Q1 2025
Subscription Revenue ($USD Millions)$114.998 $115.033 $116.849
Other Revenue ($USD Millions)$1.444 $1.476 $1.348
Total Revenue ($USD Millions)$116.442 $116.509 $118.197

KPIs

KPIQ4 2024Q1 2025
ARR ($USD Millions)$482.5 $492.7
Dollar-Based Net Revenue Retention (%)103% ~101%
Customers ≥$50k ARR (count)2,349 2,398
% Revenue Outside North America45% 43%
Cash and Equivalents ($USD Millions)$85.2 $94.1
Total Debt, net ($USD Millions)$333.1 $332.6
Weighted Avg Diluted Shares (millions, non-GAAP)188.349 189.127

Q1 2025 vs Wall Street Consensus (S&P Global)

MetricActual Q1 2025Consensus Q1 2025Surprise
Revenue ($USD Millions)$118.197 $115.552*+$2.645m (+2.3%)
Non-GAAP Diluted EPS ($USD)$0.08 $0.0583*+$0.0217

Values retrieved from S&P Global.*

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Revenue ($USD Millions)FY 2025$486.5–$492.5 $492–$497 Raised (midpoint +$5m)
ARR ($USD Millions)FY 2025$514–$522 $519–$525 Raised
Adjusted EBITDA ($USD Millions)FY 2025$132–$138 $134–$139 Raised
Revenue ($USD Millions)Q2 2025N/A$125.5–$126.5 New
Adjusted EBITDA ($USD Millions)Q2 2025N/A$34–$35 New
Non-GAAP Tax Rate (%)Q2/FY 202525%–29% (FY 2025) 20%–21% (Q2 & FY) Lowered
CapEx (% of Revenue)FY 2025~6% ~6% Maintained
Adjusted EBITDA → Unlevered FCF Conversion (%)FY 2025~65% ~68% Raised
FX AssumptionsFY 2025EUR 1.04, GBP 1.25 EUR 1.07, GBP 1.27 Updated

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2: Q3’24; Q-1: Q4’24)Current Period (Q1’25)Trend
AI/Technology initiativesAI-enhanced restore; open Ecoverse, RMM champion; AI developer portal AI-powered SOC automating ~70% remediation; Microsoft 365 Breach Prevention; Vulnerability Management in UEM Expanding AI-first security and UEM features
Channel expansion (Resellers/MSP)Building reseller/channel strategy; Adlumin adds reseller relationships Added resellers globally; largest new bookings deal; early innings but “green shoots” Positive traction; larger impact expected in 2026
Tariffs/MacroGeneral cautionary macro risks Changing tariff policy injecting caution; pipeline strong; minor elongation anecdotes Watch macro; demand steady
Product performance (Cove, UEM, Adlumin)Cove largest revenue product; strong bookings; Adlumin fastest-growing SKU post-acquisition Cove: +20% domain backup speed; Adlumin MDR awards; VM feature driving differentiation Strengthening; cross-sell opportunity
Regulatory/complianceCompliance frameworks (CMMC/NIS2/etc.) Commitment to CMMC 2.0 readiness to widen regulated-sector appeal Building compliance moat
R&D footprint—India R&D site investment (part of FY plan) Investing for growth

Management Commentary

  • “Our earnings reflect continued progress advancing cyber-resiliency… the launch of new security capabilities, strong addition of channel partners… and our largest new bookings deal ever showcase that N‑able is innovating and growing.” — CEO John Pagliuca .
  • “Q1 revenue and adjusted EBITDA both came in above the high end of our guidance… we are raising our ARR and revenue guidance… and raising our adjusted EBITDA guidance.” — CFO Tim O’Brien .
  • “We are automating 70% of incident and threat remediation activities across thousands of end customers… This gives us a competitive edge against legacy approaches.” — CEO John Pagliuca .
  • “We ended the quarter with ~94m cash and net leverage ~1.5x.” — CFO Tim O’Brien .

Q&A Highlights

  • Adlumin contribution and organic view: Adlumin ARR was ~$21m at acquisition; helps back into organic growth rate .
  • NRR/seasonality: NRR (~101%) seen as trough; expected to improve through 2025 via cross-sell and modest pricing (1–2%) .
  • Reseller traction: Early innings but meaningful “green shoots” across North America and EMEA; largest new deal ever via reseller channel .
  • FX and ASC 606: Of the ~$2.6m revenue beat vs guidance, ~+$2m was FX; Q1 saw modest positive ASC 606 impact; full-year 606 headwind ~4 points remains .
  • Profit trajectory: 2025 prioritizes growth investments (Adlumin, India R&D, channel); margin model targeted to return to low-30s in 2026 .

Estimates Context

  • Q1 2025: Revenue $118.197m vs consensus $115.552m (+2.3%); non-GAAP diluted EPS $0.08 vs consensus $0.0583; both beats. CFO noted FX tailwind and minor positive ASC 606 in Q1 that won’t repeat at the same magnitude through the year .
  • Q2 2025: Guidance revenue $125.5–$126.5m vs consensus ~$125.87m; adjusted EBITDA guidance $34–$35m broadly in line with consensus trends .
    Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Solid execution with a clean beat on Q1 revenue and EPS; the raise to FY revenue/ARR/EBITDA guidance is a positive catalyst, though some Q1 upside was FX and ASC 606 timing-related.
  • Near-term margin compression reflects integration costs (Adlumin), amortization, and strategic investments; management guides margins back to low-30s in 2026 .
  • Product differentiation is strengthening: embedded Vulnerability Management in UEM and Microsoft 365 Breach Prevention deepen the security moat and stickiness .
  • Channel strategy broadening beyond MSPs into resellers should unlock new TAM; expect more visible contribution in 2026, with early wins already evident .
  • ARR growth of ~11% constant currency and higher mix of ≥$50k ARR customers indicate healthier account quality; watch NRR to confirm inflection from the Q1 trough .
  • FX remains a swing factor; updated FY FX (EUR 1.07, GBP 1.27) supports raised revenue outlook; monitor macro/tariff headlines for deal timing effects .
  • Capital allocation flexibility improved via $75m buyback authorization; net leverage ~1.5x and EBITDA→UFCF conversion raised to ~68% underpin cash generation .