N-Able (NABL) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached $116.4 million, up 8.3% year-over-year, driven by growth in data protection, security, and remote monitoring, with subscription revenue comprising 98.8% of total revenue.

• Adjusted EBITDA for Q3 2024 was $44.8 million, up 22.7% year-over-year, with a margin of 39%, exceeding guidance.

• Over 50% of monthly recurring revenue is now under long-term contracts, expected to drive higher retention and expansion.

• Cove became the largest recurring revenue product group, with strong demand for security and data protection solutions among MSPs and SMEs.

• As of September 30, 2024, there were approximately 25,000 customers and 2,275 MSP partners with annualized recurring revenue over $50,000, representing 57% of total ARR.

Financial highlights

• Subscription revenue was $115 million, up 9.3% year-over-year; other revenue was $1.4 million, down 38.8%.

• GAAP gross margin was 82.9%; non-GAAP gross margin was 84% TTM.

• Dollar-based net revenue retention was 105% (104% constant currency); gross revenue retention was 86% for Q3 2024.

• Non-GAAP EPS was $0.13; cash and equivalents at $174.4 million; net leverage at 1x.

• Operating income for Q3 2024 was $23.9 million, up from $18.4 million in Q3 2023.

Outlook and guidance

• Q4 2024 revenue expected at $111.5–$113 million (3–4% year-over-year growth); adjusted EBITDA $38–$38.5 million (34% margin).

• Full-year 2024 revenue guidance is $461.2–$462.7 million (9–10% growth); adjusted EBITDA $169.3–$169.8 million (37% margin).

• CapEx to remain at ~5% of revenue; adjusted EBITDA to unlevered free cash flow conversion at 62%.

• Headwinds from estate optimization, pricing, and macroeconomic factors expected to persist through H1 2025.

• Existing cash and cash flows are expected to fund operations and capital expenditures for at least the next twelve months.