Executive Summary

Q4 revenue of $116.5M grew 7.5% YoY and exceeded both the original Q4 guide and the updated post-Adlumin revenue guide; adjusted EBITDA of $38.1M also finished above the updated guide despite integration and FX headwinds .
Non-GAAP EPS was $0.10 vs GAAP EPS of $0.02; non-GAAP profit reflected add-backs for stock-based comp, amortization, and transaction/restructuring costs tied to the Adlumin acquisition .
FY25 outlook calls for ARR of $514–$522M (7–8% YoY CC), revenue of $486.5–$492.5M (6–8% CC), and adjusted EBITDA margin of 27–28%, reflecting planned investment, ASC 606 timing headwinds (~4 pts FY), and Adlumin integration, with margins targeted to return to >30% in 2026 .
Stock reaction catalysts: evidence of cross-sell traction (Adlumin contributed ~$2.5M to Q4 revenue and had ~$21M ARR at close), ARR acceleration through 2025, and clear explanation of revenue recognition headwinds vs underlying demand trends .

What Went Well and What Went Wrong

What Went Well

Revenue and adjusted EBITDA finished above guidance; management cited steady demand, disciplined cost management, and early contribution from Adlumin (~$2.5M from Nov 20 close through quarter-end) .
Security momentum: XDR/MDR became the fastest-growing SKU and largest pipeline generator in FY24; acquiring Adlumin expands platform breadth and channel reach, with endpoint-agnostic XDR architecture and options to decouple software (XDR) from services (MDR) .
Cove Data Protection continues to outpace company growth and remains the largest revenue product; AI-enhanced restore accuracy >95% and expanded integrations underscore product moat .

What Went Wrong

Profitability compression QoQ: adjusted EBITDA margin fell to 32.7% from 38.5% in Q3, reflecting integration, investment, and FX; CFO guided FY25 margins to 27–28% before a return to >30% in 2026 .
Trailing 12-month net revenue retention moderated to ~103% (from 105% in Q3), with management expecting TTM gross/net retention to bottom in Q1’25 before improving from Q2 .
ASC 606 revenue recognition dynamics from the long-term contract initiative introduce near-term growth headwinds (~5 pts in Q1’25; ~4 pts FY25), adding “lumpiness” to reported revenue despite underlying ARR growth .

Financial Results

Headline P&L vs Prior Quarters

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($M)	$119.4	$116.4	$116.5
Revenue YoY Growth	12.6%	8.3%	7.5%
GAAP Gross Margin %	84.0%	82.9%	80.0%
Non-GAAP Gross Margin %	84.7%	83.7%	82.3%
Adjusted EBITDA ($M)	$46.8	$44.8	$38.1
Adjusted EBITDA Margin %	39.2%	38.5%	32.7%
GAAP Diluted EPS	$0.05	$0.06	$0.02
Non-GAAP Diluted EPS	$0.14	$0.13	$0.10

Note: Company-reported results. Non-GAAP reconciliations provided by NABL .

Segment/Revenue Mix

Revenue Detail ($M)	Q2 2024	Q3 2024	Q4 2024
Subscription Revenue	$117.4	$115.0	$115.0
Other Revenue	$2.0	$1.4	$1.5
Total Revenue	$119.4	$116.4	$116.5

KPIs and Balance Sheet/Cash

KPI / Balance Sheet	Q3 2024	Q4 2024	FY 2024
ARR ($M)	—	$482.5	$482.5
TTM Dollar-Based NRR	105%	~103%	~103% exit
Customers ≥$50k ARR (Count)	—	2,349	2,349
≥$50k ARR Share of Total ARR	—	57%	57%
Intl. Revenue Mix	—	~45% Q4	46% FY
Cash & Cash Equivalents ($M)	$174.4	$85.2	$85.2
Total Debt, net ($M)	$333.6	$333.1	$333.1
Unlevered FCF ($M)	$27.0	$29.0	$98.7

Non-GAAP adjustments materially impacted non-GAAP net income and margins (notably stock-based comp, amortization of acquired tech/intangibles, transaction-related and restructuring costs) .

Actual vs Estimates

S&P Global consensus EPS and revenue for Q4 2024 were unavailable at time of analysis due to data access limits. We benchmarked results against company guidance instead .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue ($M)	Q4 2024	$111.5–$113.0 (11/7)	$113.3–$114.8 (11/20)	Raised
Adjusted EBITDA ($M)	Q4 2024	$38.0–$38.5 (11/7)	$35.0–$35.5 (11/20)	Lowered
Revenue ($M)	FY 2024	$461.2–$462.7 (11/7)	$463.0–$464.5 (11/20)	Raised
Adjusted EBITDA ($M)	FY 2024	$169.3–$169.8 (11/7)	$166.3–$166.8 (11/20)	Lowered
Revenue ($M)	Q1 2025	—	$115.0–$116.0	New
Adjusted EBITDA ($M)	Q1 2025	—	$27.5–$28.5 (24–25% margin)	New
ARR ($M)	FY 2025	—	$514–$522 (7–9% CC)	New
Revenue ($M)	FY 2025	—	$486.5–$492.5 (6–8% CC)	New
Adjusted EBITDA ($M)	FY 2025	—	$132–$138 (27–28% margin)	New

Context: FY25 reported growth incorporates ASC 606 headwinds (~4 pts FY; ~5 pts Q1) and FX assumptions (EUR 1.04; GBP 1.25) .

Earnings Call Themes & Trends

Topic	Q2 2024 (Q-2)	Q3 2024 (Q-1)	Q4 2024 (Current)	Trend
AI/Tech initiatives	Foundation on security & data protection; compliance posture (CISA pledge)	Expanded TAP integrations, compliance initiatives	AI-enhanced restore (>95% accuracy); AI-powered developer portal; cloud-native, AI-powered XDR	Accelerating
Security/XDR/MDR	Security suite strength highlighted	Continued positioning	Adlumin acquisition; XDR fastest-growing SKU; endpoint-agnostic XDR and MDR optionality	Step-change up
Go-to-market & channel	Long-term contract initiative success	—	Mix shift to >50% annual contracts; reseller channel expansion (NA first; U.K./DACH/AUS next)	Expanding
Macro/FX	—	—	FY25 FX assumptions; noted growth-rate headwinds from 606 timing	FX headwind acknowledged
Retention metrics	—	TTM DBNRR 105%	~103% TTM; expect bottom in Q1’25, improvement thereafter	Moderating, then improving
Product performance	Cove + security momentum	Solid execution	Cove remains largest product; outgrowing company; XDR/MDR cross-sell wins	Strong

Management Commentary

“We closed 2024 in a position of strength and we believe we are poised for even greater success in 2025… Our guide calls for over $500 million of ARR and strong profit margins.” – CEO John Pagliuca .
“Adjusted EBITDA was $38.1 million in Q4 (32.7% margin)… We continue to execute, see steady demand in our markets and maintain disciplined cost management.” – CFO Tim O’Brien .
On Adlumin: “Initially brought to market via our partnership… quickly became our fastest-growing SKU and largest pipeline generator in fiscal year '24… We were thrilled to acquire Adlumin and its cloud-native, AI-powered XDR platform.” – CEO .
Channel strategy: “We transitioned the business… from <10% of revenue from annual contracts to >50%… We invested in people and programs to enhance our ability to bring our solutions to market through [resellers].” – CEO .

Q&A Highlights

Adlumin contribution and baseline: ~$2.5M Q4 revenue contribution from Nov 20 close; ~$21M ARR at acquisition; not breaking out FY25 contribution in guide .
Revenue recognition headwinds: ASC 606 timing creates ~5 pts YoY growth headwind in Q1’25 and ~4 pts for FY25; ARR introduced as new top-line velocity measure .
ARR trajectory: Guided exit FY25 ARR growth of 7–9% CC; expecting acceleration vs pro forma exit FY24 (~7%) .
Competitive positioning: Endpoint-agnostic XDR; ability to separate XDR software from MDR services; contrasts with “black box” MDR competitors; highlights cloud-native/AI automation and margin benefits .
Channel expansion: Positive reception from large resellers; leveraging NA reseller channel and expanding to U.K./DACH/Australia; one-stop portfolio (Cove, UEM, EDR/XDR/MDR) resonating .

Estimates Context

Wall Street consensus from S&P Global for Q4 2024 revenue/EPS was unavailable at the time of analysis due to request limits. As a result, comparisons vs estimates are not shown; we benchmarked actuals vs company guidance and prior updates instead .

Key Takeaways for Investors

Underlying demand remains solid; Q4 beat company guidance on both revenue and adjusted EBITDA, aided by Adlumin’s early contribution and strong execution .
FY25 guide reflects deliberate near-term investment and recognized revenue headwinds (ASC 606, FX); ARR should better capture momentum and is guided to accelerate through 2025 .
Strategic rationale for Adlumin is compelling: expands TAM beyond MSPs, strengthens security stack, and opens North American reseller routes with plans to replicate internationally; early booking strength is encouraging .
Profitability dip is intentional and transitory per management; integration costs and investments weigh on FY25 margins, with a stated path back to >30% adjusted EBITDA margins in 2026 .
Product flywheel: Cove’s growth and AI enhancements, UEM innovation, and endpoint-agnostic XDR/MDR create multiple cross-sell vectors across a diversified, global base (~45–46% international) .
Watch retention metrics: management expects TTM gross/net retention to trough in Q1’25 and improve from Q2; evidence of reseller traction and ARR acceleration are key checkpoints .
Near-term trading implication: positive setup if investors recalibrate for ASC 606/FX optics and focus on ARR growth, security cross-sell, and channel expansion; investor day (Mar 13) flagged as a potential narrative catalyst .

Appendix: Actuals vs Company Guidance (Q4 2024)

Metric	Original Q4 Guide (11/7)	Updated Q4 Guide (11/20)	Actual
Revenue ($M)	$111.5–$113.0	$113.3–$114.8	$116.5
Adjusted EBITDA ($M)	$38.0–$38.5	$35.0–$35.5	$38.1

Additional References:

Q4 press release financials and reconciliations ; 8-K with exhibits .
Q3 press release and guidance .
Q2 press release and guidance .
Adlumin acquisition press release and financial terms .

N-able, Inc. (NABL)·Q4 2024 Earnings Summary