0001834488False00018344882024-08-082024-08-08

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
 
FORM 8-K
 CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
August 8, 2024
Date of Report (Date of earliest event reported)
 
N-able, Inc.
(Exact name of registrant as specified in its charter)
   
Delaware001-4029785-4069861
(State or other jurisdiction
of incorporation)		(Commission
File Number)		(IRS Employer
Identification No.)
30 Corporate Drive
Suite 400
Burlington, Massachusetts 01803
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (781) 328-6490

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
 
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, $0.001 par valueNABLNew York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐  


Item 2.02Results of Operations and Financial Condition.
On August 8, 2024, N-able, Inc. (“N-able”) issued a press release regarding, and will hold a conference call announcing, its financial results for the second quarter ended June 30, 2024. A copy of N-able's press release is attached hereto as Exhibit 99.1.
The information contained in this report shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section. The information in this report shall not be incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
N-able refers to non-GAAP financial information in both the press release and the conference call. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in the attached press release.

Item 9.01Financial Statements and Exhibits.
(d)Exhibits.


Exhibit
Number		  Description
99.1
104Cover Page Interactive Data File (formatted as Inline XBRL)




SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
N-able, Inc.
Dated:August 8, 2024By:/s/ Tim O'Brien
Tim O'Brien
Chief Financial Officer



Exhibit 99.1

n-ablelogo.jpg
N-able Announces Second Quarter 2024 Results

Second-Quarter 2024 Revenue Increased 13% Year-Over-Year

Raised Mid-Point of Full-Year 2024 Revenue Outlook to $464.0M

Raised Full-Year 2024 Adjusted EBITDA Margin Outlook to 36%

BURLINGTON, Massachusetts -August 8, 2024 - N-able, Inc. (NYSE:NABL), a global software company helping IT services providers deliver remote monitoring and management, data protection as-a-service and security solutions, today reported results for its second quarter ended June 30, 2024.

“N-able’s second quarter performance underscores the need for IT solutions among small and medium sized businesses and MSPs,” said N-able president and CEO John Pagliuca. “Our award winning data protection product Cove and our powerful security suite showed particular strength, highlighting the importance of resilience and protection. We also saw continued success with our long-term contract initiative, which we believe further cements N-able as a strategic partner within our customers’ operations. We are eager to build on the progress we made in the second quarter and advance our mission to empower MSPs with leading software solutions.”

“Our second quarter performance marks our seventh consecutive quarter operating north of the Rule of 45 on a constant currency revenue growth and adjusted EBITDA basis,” added N-able CFO Tim O’Brien. “As we enter the second half of the year, we are focused on strong execution and are raising the mid-point of our full-year revenue and profit outlook.”
Second quarter 2024 financial highlights:

•Total revenue of $119.4 million, representing 12.6% year-over-year growth, or 12.7% year-over-year growth on a constant currency basis.
•Subscription revenue of $117.4 million, representing 13.6% year-over-year growth, or 13.7% year-over-year growth on a constant currency basis.
•GAAP gross margin of 84.0% and non-GAAP gross margin of 84.7%.
•GAAP net income of $9.5 million, or $0.05 per diluted share, and non-GAAP net income of $26.6 million, or $0.14 per diluted share.
•Adjusted EBITDA of $46.8 million, up 34.1% year-over-year, representing an adjusted EBITDA margin of 39.2%.

For a reconciliation of our GAAP to non-GAAP results, please see the tables below.

Additional highlights for the second quarter of 2024 include:

•N-able was named to the prestigious MES Midmarket 100 for the second consecutive year. The MES Midmarket 100 recognizes top vendors that have proven themselves to be forward-thinking technology providers offering products and services that support midmarket organizations and drive growth and innovation for those customers.
•N-able signed the CISA Secure by Design Pledge. N‑able was part of the first group of companies committed to the pledge and is currently the only vendor signed up with an ecosystem that is built from the ground up with MSPs in mind. The CISA pledge is taken by companies who are committed to making a good-faith effort to work towards increased security and transparency within the next year. By signing the pledge, N‑able is further prioritizing security in its products and services, while building on its defenses against cyberthreats.
•N-able and MSPAlliance joined forces to help MSPs navigate cybersecurity compliance requirements. Built by MSPs exclusively for MSPs, Cyber Verify empowers MSPs across diverse sizes and maturity levels with a set of comprehensive tools and resources to facilitate a seamless integration of compliance processes that elevate the quality of services delivered to their clientele and deliver powerful, recurring revenue services. N‑able partners using MSPAlliance’s Cyber Verify Program can quickly identify gaps, certify alignment with compliance requirements, and offer Compliance-as-a-Service solutions to their customers.
•N-able was honored by Comparably for the third consecutive year for best career growth. N‑able was also included on the Best Leadership Teams annual list, which highlights the dedication and vision of the leadership team anchored by the company’s core values: N-rich Lives, N-spire Others, and N-joy the Journey.




Balance Sheet

As of June 30, 2024, total cash and cash equivalents were $157.5 million and total debt, net of debt issuance costs, was $334.1 million.

The financial results included in this press release are preliminary and pending final review by the company and its external auditors. Financial results will not be final until N-able files its quarterly report on Form 10-Q for the period. Information about N-able's use of non-GAAP financial measures is provided below under “Non-GAAP Financial Measures.”

Financial Outlook

As of August 8, 2024, N-able is providing its financial outlook for the third quarter of 2024 and full-year 2024. The financial information below represents forward-looking non-GAAP financial information, including adjusted EBITDA. These non-GAAP financial measures exclude, among other items mentioned below, amortization of acquired intangible assets and developed technology, depreciation expense, income tax expense, interest expense, net, unrealized foreign currency (gains) losses, transaction related costs, spin-off costs, stock-based compensation expense and related employer-paid payroll taxes and restructuring and other costs. We have not reconciled our estimates of these non-GAAP financial measures to their most directly comparable GAAP measure as a result of uncertainty regarding, and the potential variability of, these excluded items in future periods. Accordingly, reconciliation is not available without unreasonable effort, although it is important to note that these excluded items could be material to our results computed in accordance with GAAP in future periods. Our reported results provide reconciliations of non-GAAP financial measures to their nearest GAAP equivalents.

The financial outlook provided below reflects N-able's expectations, as of the date of this release, regarding the impact on its business of changing foreign exchange rates and current macroeconomic dynamics.

Financial Outlook for the Third Quarter of 2024

N-able management currently expects to achieve the following results for the third quarter of 2024:

•Total revenue in the range of $114.5 to $115.0 million, representing 6% to 7% year-over-year growth, or approximately 7% growth on a constant currency basis.
•Adjusted EBITDA in the range of $39.5 to $40.0 million, representing approximately 35% of total revenue.

Financial Outlook for Full-Year 2024

N-able management currently expects to achieve the following results for the full-year 2024:

•Total revenue in the range of $463.0 to $465.0 million, representing approximately 10% year-over-year growth on both a reported and a constant currency basis.
•Adjusted EBITDA in the range of $165.5 to $167.5 million, representing approximately 36% of total revenue.

Additional details on the company's outlook will be provided on the conference call.

Conference Call and Webcast

In conjunction with this announcement, N-able will host a conference call today to discuss its financial results, business and business outlook at 8:30 a.m. ET on August 8, 2024. A live webcast of the call will be available on the N-able Investor Relations website at http://investors.n-able.com. A replay of the webcast will be available on a temporary basis shortly after the event on the N-able Investor Relations website.

Forward-Looking Statements

This press release contains “forward-looking” statements, which are subject to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements regarding our financial outlook for the third quarter and full-year 2024 and the impact of macroeconomic conditions on our business. These forward-looking statements are based on management's beliefs and assumptions and on information currently available to management. Forward-looking statements include all statements that are not historical facts and may be signified by terms such as “aim,” “anticipate,” “believe,” “continue,” “expect,” “feel,” “intend,” “estimate,” “seek,” “plan,” “may,” “can,” “could,” “should,” “will,” “would” or similar


expressions and the negatives of those terms. Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially and adversely different from any future results, performance or achievements expressed or implied by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the following: (a) risks related to our spin-off from SolarWinds into a newly created and separately-traded public company, including that the spin-off may not achieve some or all of any anticipated benefits with respect to our business; that the distribution, together with certain related transactions, may not qualify as a transaction that is generally tax-free for U.S. federal income tax purposes, which could result in N-able incurring significant tax liabilities, and, in certain circumstances, requiring us to indemnify SolarWinds for material taxes and other related amounts pursuant to indemnification obligations under the tax matters agreement; (b) the impact of adverse economic conditions; (c) our ability to sell subscriptions to new managed service provider (“MSP”) partners, to sell additional solutions to our existing MSP partners and to increase the usage of our solutions by our existing MSP partners, as well as our ability to generate and maintain MSP partner loyalty; (d) any decline in our renewal or net retention rates; (e) the possibility that general economic conditions or uncertainty may cause information technology spending to be reduced or purchasing decisions to be delayed, including as a result of inflation, actions taken by central banks to counter inflation, rising interest rates, war and political unrest, military conflict (including between Russia and Ukraine and in the Middle East), terrorism, sanctions or other geopolitical events globally, or that such factors may otherwise harm our business, financial condition or results of operations; (f) any inability to generate significant volumes of high-quality sales leads from our digital marketing initiatives and convert such leads into new business at acceptable conversion rates; (g) any inability to successfully identify, complete and integrate acquisitions and manage our growth effectively; (h) any inability to resell third-party software or integrate third-party software into our solutions, or find suitable replacements for such third-party software; (i) risks associated with our international operations; (j) foreign exchange gains and losses related to expenses and sales denominated in currencies other than the functional currency of an associated entity; (k) risks that cyberattacks, including the cyberattack on SolarWinds’ Orion Software Platform and internal systems announced by SolarWinds in December 2020 (the “Cyber Incident”), and other security incidents may result in compromises or breaches of our, our MSP partners’, or their SME customers’ systems, the insertion of malicious code, malware, ransomware or other vulnerabilities into our, our MSP partners’, or their SME customers’ environments, the exploitation of vulnerabilities in our, our MSP partners’, or their SME customers’ security, the theft or misappropriation of our, our MSP partners’, or their SME customers’ proprietary and confidential information, and interference with our, our MSP partners’, or their SME customers’ operations, exposure to legal and other liabilities, higher MSP partner and employee attrition and the loss of key personnel, negative impacts to our sales, renewals and upgrades and reputational harm and other serious negative consequences, any or all of which could materially harm our business; (l) our status as a controlled company; (m) our ability to attract and retain qualified employees and key personnel; (n) the timing and success of new product introductions and product upgrades by us or our competitors; (o) our ability to protect and defend our intellectual property and not infringe upon others’ intellectual property; (p) the possibility that our operating income could fluctuate and may decline as a percentage of revenue as we make further expenditures to expand our operations in order to support additional growth in our business; (q) our indebtedness, including increased borrowing costs resulting from rising interest rates, potential restrictions on our operations and the impact of events of default; (r) our ability to operate our business internationally and increase sales of our solutions to our MSP partners located outside of the United States; and (s) such other risks and uncertainties described more fully in documents filed with or furnished to the Securities and Exchange Commission, including the risk factors described in N-able’s Annual Report on Form 10-K for the year ended December 31, 2023, that N-able filed with the SEC on February 29, 2024. All information provided in this release is as of the date hereof and N-able undertakes no duty to update this information except as required by law.

Non-GAAP Financial Measures

In addition to financial measures prepared in accordance with GAAP, we use certain non-GAAP financial measures to clarify and enhance our understanding, and aid in the period-to-period comparison, of our performance. We believe that these non-GAAP financial measures provide supplemental information that is meaningful when assessing our operating performance because they exclude the impact of certain amounts that our management and board of directors do not consider part of core operating results when assessing our operational performance, allocating resources, preparing annual budgets and determining compensation. Accordingly, these non-GAAP financial measures may provide insight to investors into the motivation and decision-making of management in operating the business.

N-able also believes that these non-GAAP financial measures are used by investors and security analysts to (a) compare and evaluate its performance from period to period and (b) compare its performance to those of its competitors. These non-GAAP measures exclude certain items that can vary substantially from company to company depending upon their financing and accounting methods, the book value of their assets, their capital structures and the method by which their assets were acquired.

As a result, these non-GAAP financial measures have limitations and should not be considered in isolation from, or as a substitute for, their most comparable GAAP measures. These non-GAAP financial measures are not prepared in accordance with GAAP, do not reflect a comprehensive system of accounting and may not be completely comparable to similarly titled measures of other companies due to potential differences in the exact method of calculation between companies. Certain items that are excluded from these non-GAAP financial measures can have a material impact on operating and net income.



N-able's management and board of directors compensate for these limitations by using these non-GAAP financial measures as supplements to GAAP financial measures and by reviewing the reconciliations of the non-GAAP financial measures to their most comparable GAAP financial measure. Set forth in the tables below are the corresponding GAAP financial measures for each non-GAAP financial measure presented. Investors are encouraged to review the reconciliations of these non-GAAP financial measures to their most comparable GAAP financial measures that are set forth in the tables below.

Non-GAAP Gross Margin, Non-GAAP Operating Income and Non-GAAP Operating Margin. We provide non-GAAP total cost of revenue, non-GAAP gross margin, non-GAAP operating expense and non-GAAP operating income and related non-GAAP gross and operating margins excluding such items as stock-based compensation expense and related employer-paid payroll taxes, amortization of acquired intangible assets, transaction related costs, spin-off costs and restructuring costs and other. We define non-GAAP gross and operating margins as non-GAAP gross profit and operating income divided by total revenue. Management believes these measures are useful for the following reasons:

•Stock-Based Compensation Expense and Related Employer-Paid Payroll Taxes. We provide non-GAAP information that excludes expenses related to stock-based compensation and related employer-paid payroll taxes associated with our employees’ participation in N-able's stock-based incentive compensation plans. We believe that the exclusion of stock-based compensation expense provides for a better comparison of our operating results to prior periods and to our peer companies as the calculations of stock-based compensation vary from period to period and company to company due to different valuation methodologies, subjective assumptions and the variety of award types. Employer-paid payroll taxes on stock-based compensation is dependent on our stock price and the timing of the taxable events related to the equity awards, over which our management has little control, and does not necessarily correlate to the core operation of our business. Because of these unique characteristics of stock-based compensation and related employer-paid payroll taxes, management excludes these expenses when analyzing the organization’s business performance.
•Amortization of Acquired Technologies and Intangible Assets. We provide non-GAAP information that excludes expenses related to purchased technologies and intangible assets associated with our acquisitions. We believe that eliminating this expense from our non-GAAP measures is useful to investors because the amortization of acquired technologies and intangible assets can be inconsistent in amount and frequency and is significantly impacted by the timing and magnitude of our acquisition transactions, which also vary in frequency from period to period. Accordingly, we analyze the performance of our operations in each period without regard to such expenses.
•Transaction Related Costs. We exclude certain expense items resulting from proposed and completed acquisitions, dispositions and similar transactions, such as legal, accounting and advisory fees, changes in fair value of contingent consideration, costs related to integrating the acquired businesses, deferred compensation, severance and retention expense. We consider these adjustments, to some extent, to be unpredictable and dependent on a significant number of factors that are outside of our control. Furthermore, such proposed and completed transactions result in operating expenses that would not otherwise have been incurred by us in the normal course of our organic business operations. We believe that providing non-GAAP measures that exclude transaction related costs allows investors to better review and understand the historical and current results of our continuing operations and also facilitates comparisons to our historical results and results of peer companies with different transaction related activities, both with and without such adjustments.
•Spin-off Costs. We exclude certain expense items resulting from the spin-off into a newly created and separately traded public company. These costs include legal, accounting and advisory fees, system implementation costs and other incremental costs incurred by us related to the separation from SolarWinds. The spin-off transaction results in operating expenses that would not otherwise have been incurred by us in the normal course of our organic business operations. We believe that providing non-GAAP measures that exclude these costs facilitates a more meaningful evaluation of our operating performance and comparisons to our past operating performance.
•Restructuring Costs and Other. We provide non-GAAP information that excludes restructuring costs such as severance, certain employee relocation costs, and the estimated costs of exiting and terminating facility lease commitments, as they relate to our corporate restructuring and exit activities. These costs are inconsistent in amount and are significantly impacted by the timing and nature of these events. Therefore, although we may incur these types of expenses in the future, we believe that eliminating these costs for purposes of calculating the non-GAAP financial measures facilitates a more meaningful evaluation of our operating performance and comparisons to our past operating performance.

Non-GAAP Net Income and Non-GAAP Net Income Per Diluted Share. We believe that the use of non-GAAP net income and non-GAAP net income per diluted share is helpful to our investors to clarify and enhance their understanding of past performance and future prospects. Non-GAAP net income is calculated as net income excluding the adjustments to non-GAAP


gross profit and non-GAAP operating income and the income tax effect of the non-GAAP exclusions. We define non-GAAP net income per diluted share as non-GAAP net income divided by the weighted average outstanding common shares.

Adjusted EBITDA and Adjusted EBITDA Margin. We regularly monitor adjusted EBITDA and adjusted EBITDA margin, as they are measures we use to assess our operating performance. We define adjusted EBITDA as net income or loss, excluding amortization of acquired intangible assets and developed technology, depreciation expense, income tax expense, interest expense, net, unrealized foreign currency (gains) losses, transaction related costs, spin-off costs, stock-based compensation expense and related employer-paid payroll taxes and restructuring and other costs. We define adjusted EBITDA margin as adjusted EBITDA divided by total revenue. Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP. Some of these limitations include: although depreciation and amortization are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements; adjusted EBITDA does not reflect changes in, or cash requirements for, our working capital needs; adjusted EBITDA does not reflect the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our related party debt; adjusted EBITDA does not reflect tax payments that may represent a reduction in cash available to us; and other companies, including companies in our industry, may calculate adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Non-GAAP Revenue on a Constant Currency Basis. We provide non-GAAP revenue on a constant currency basis to provide a framework for assessing our performance excluding the effect of foreign currency rate fluctuations. To present this information, current period results for revenue contracts denominated in currencies other than U.S. Dollars are converted into U.S. Dollars at the average exchange rates in effect during the corresponding prior period presented. We believe that providing non-GAAP revenue on a constant currency basis facilitates the comparison of non-GAAP revenue to prior periods.

Unlevered Free Cash Flow. Unlevered free cash flow is a measure of our liquidity used by management to evaluate cash flow from operations, after the deduction of capital expenditures and prior to the impact of our capital structure, transaction related costs, restructuring costs, spin-off costs, employer-paid payroll taxes on stock awards and other one-time items, that can be used by us for strategic opportunities and strengthening our balance sheet. However, given our debt obligations, unlevered free cash flow does not represent residual cash flow available for discretionary expenses.

About N-able

N-able fuels IT services providers with powerful software solutions to monitor, manage, and secure their customers’ systems, data, and networks. Built on a scalable platform, we offer secure infrastructure and tools to simplify complex ecosystems, as well as resources to navigate evolving IT needs. We help partners excel at every stage of growth, protect their customers, and expand their offerings with an ever-increasing, flexible portfolio of integrations from leading technology providers. n-able.com

© 2024 N-able, Inc. All rights reserved.

Source: N-able, Inc.
Category: Financial
CONTACTS:
Investors: Media:
Tim O'Brien
ir@n-able.com
 Kim Cecchini
Phone: 202.391.5205
pr@n-able.com




N-able, Inc.
Consolidated Balance Sheets
(In thousands)
(Unaudited)

June 30,December 31,
20242023
Assets
Current assets:
Cash and cash equivalents$157,509 $153,048 
Accounts receivable, net of allowances of $1,265 and $1,171 as of June 30, 2024 and December 31, 2023, respectively37,195 40,013 
Income tax receivable12,368 8,001 
Recoverable taxes18,794 12,116 
Prepaid and other current assets26,339 11,613 
Total current assets252,205 224,791 
Property and equipment, net34,691 36,838 
Operating lease right-of-use assets29,370 32,067 
Deferred taxes1,032 1,087 
Goodwill826,985 838,497 
Intangible assets, net5,621 6,717 
Other assets, net24,759 22,794 
Total assets$1,174,663 $1,162,791 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$6,221 $5,239 
Accrued liabilities and other44,946 49,366 
Current operating lease liabilities5,942 6,443 
Income taxes payable13,816 4,523 
Current portion of deferred revenue10,544 12,646 
Current debt obligation3,500 3,500 
Total current liabilities84,969 81,717 
Long-term liabilities:
Deferred revenue, net of current portion187 167 
Non-current deferred taxes1,774 1,820 
Non-current operating lease liabilities30,203 33,064 
Long-term debt, net of current portion330,555 331,509 
Other long-term liabilities2,605 3,154 
Total liabilities450,293 451,431 
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value: 550,000,000 shares authorized and 185,233,181 and 183,220,689 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively185 183 
Preferred stock, $0.001 par value: 50,000,000 shares authorized and no shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively— — 
Additional paid-in capital676,049 666,522 
Accumulated other comprehensive (loss) income(9,021)4,409 
Retained earnings57,157 40,246 
Total stockholders' equity724,370 711,360 
Total liabilities and stockholders' equity$1,174,663 $1,162,791 




N-able, Inc.
Consolidated Statements of Operations
(In thousands, except per share information)
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Revenue:
Subscription and other revenue$119,447 $106,080 $233,196 $205,898 
Cost of revenue:
Cost of revenue18,706 16,559 36,542 32,312 
Amortization of acquired technologies458 463 919 919 
Total cost of revenue19,164 17,022 37,461 33,231 
Gross profit100,283 89,058 195,735 172,667 
Operating expenses:
Sales and marketing32,850 34,889 68,666 67,452 
Research and development22,391 20,234 44,473 39,044 
General and administrative 23,048 18,091 40,097 35,439 
Amortization of acquired intangibles15 10 29 574 
Total operating expenses78,304 73,224 153,265 142,509 
Operating income21,979 15,834 42,470 30,158 
Other expense:
Interest expense, net(7,606)(7,530)(15,227)(14,730)
Other income, net1,142 1,004 1,427 1,992 
Total other expense, net(6,464)(6,526)(13,800)(12,738)
Income before income taxes15,515 9,308 28,670 17,420 
Income tax expense6,060 4,799 11,759 9,372 
Net income $9,455 $4,509 $16,911 $8,048 
Net income per share:
    Basic earnings per share$0.05 $0.02 $0.09 $0.04 
    Diluted earnings per share$0.05 $0.02 $0.09 $0.04 
Weighted-average shares used to compute net income per share:
    Shares used in computation of basic earnings per share:184,996 182,249 184,504 181,843 
    Shares used in computation of diluted earnings per share:187,274 185,643 187,560 184,732 



N-able, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Cash flows from operating activities
Net income$9,455 $4,509 $16,911 $8,048 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization5,904 5,146 11,723 10,813 
Provision for (benefit from) doubtful accounts41 20 94 (71)
Stock-based compensation expense11,808 11,745 23,355 21,595 
Deferred taxes6 6 — 14 
Amortization of debt issuance costs398 398 797 792 
Operating lease right-of-use assets, net151 (402)105 (512)
Loss on foreign currency exchange rates445 530 1,241 555 
Loss (gain) on contingent consideration60 (567)(1,347)(327)
Other non-cash expenses— 97 84 128 
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
Accounts receivable2,013 (4,513)1,892 (5,906)
Income tax receivable(1,921)(2,103)(4,383)(7,919)
Recoverable taxes(3,214)(4,657)(6,678)(4,974)
Prepaid expenses and other assets(9,116)1,024 (14,633)(840)
Accounts payable2,208 1,142 819 872 
Accrued liabilities and other8,212 8,234 (3,493)4,397 
Income taxes payable3,160 684 9,165 5,981 
Deferred revenue(2,371)(924)(2,082)(415)
Other long-term assets289 357 (1,631)(918)
Other long-term liabilities(250)— (477)44 
Net cash provided by operating activities27,278 20,726 31,462 31,357 
Cash flows from investing activities
Purchases of property and equipment(3,242)(3,565)(6,680)(6,969)
Purchases of intangible assets(1,903)(2,458)(3,592)(4,669)
Net cash used in investing activities(5,145)(6,023)(10,272)(11,638)
Cash flows from financing activities
Payments of tax withholding obligations related to restricted stock units(3,098)(2,402)(15,339)(8,240)
Exercise of stock options8 5 8 26 
Proceeds from issuance of common stock under employee stock purchase plan— — 1,200 771 
Deferred acquisition payments(1,000)— (1,000)— 
Repayments of borrowings from Credit Agreement(875)(875)(1,750)(1,750)
Net cash used in financing activities(4,965)(3,272)(16,881)(9,193)
Effect of exchange rate changes on cash and cash equivalents1,114 (321)152 (183)
Net increase in cash and cash equivalents18,282 11,110 4,461 10,343 
Cash and cash equivalents
Beginning of period139,227 98,080 153,048 98,847 
End of period$157,509 $109,190 $157,509 $109,190 
Supplemental disclosure of cash flow information:
Cash paid for interest$7,292 $7,014 $14,562 $13,703 
Cash paid for income taxes$4,236 $5,225 $6,015 $9,890 
Supplemental disclosure of non-cash activities:
Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses$(25)$1,119 $154 $956 
Right-of-use assets obtained in exchange for operating lease liabilities$— $483 $— $483 



N-able, Inc.
Reconciliation of GAAP to Non-GAAP Financial Measures
(In thousands, except per share information)
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
GAAP cost of revenue$19,164 $17,022 $37,461 $33,231 
Stock-based compensation expense and related employer-paid payroll taxes(441)(381)(888)(717)
Amortization of acquired technologies(458)(463)(919)(919)
Restructuring costs and other— (8)— (17)
Non-GAAP cost of revenue$18,265 $16,170 $35,654 $31,578 
GAAP gross profit$100,283 $89,058 $195,735 $172,667 
Stock-based compensation expense and related employer-paid payroll taxes441 381 888 717 
Amortization of acquired technologies458 463 919 919 
Restructuring costs and other— 8 — 17 
Non-GAAP gross profit$101,182 $89,910 $197,542 $174,320 
GAAP sales and marketing expense$32,850 $34,889 $68,666 $67,452 
Stock-based compensation expense and related employer-paid payroll taxes(3,856)(4,116)(8,229)(7,658)
Transaction related costs(4)(24)(4)(24)
Restructuring costs and other(247)(24)(418)(24)
Non-GAAP sales and marketing expense$28,743 $30,725 $60,015 $59,746 
GAAP research and development expense$22,391 $20,234 $44,473 $39,044 
Stock-based compensation expense and related employer-paid payroll taxes(2,748)(2,405)(5,533)(4,395)
Transaction related costs(25)(8)(25)(8)
Restructuring costs and other(33)(152)(57)(790)
Non-GAAP research and development expense$19,585 $17,669 $38,858 $33,851 
GAAP general and administrative expense$23,048 $18,091 $40,097 $35,439 
Stock-based compensation expense and related employer-paid payroll taxes(5,118)(5,132)(10,480)(9,880)
Transaction related costs(4,890)310 (3,494)41 
Restructuring costs and other21 (225)(410)(205)
Spin-off costs— (227)(51)(457)
Non-GAAP general and administrative expense$13,061 $12,817 $25,662 $24,938 
GAAP operating income$21,979 $15,834 $42,470 $30,158 
Amortization of acquired technologies458 463 919 919 
Amortization of acquired intangibles15 10 29 574 
Stock-based compensation expense and related employer-paid payroll taxes12,164 12,034 25,131 22,650 
Transaction related costs4,919 (278)3,523 (9)
Restructuring costs and other259 409 885 1,036 
Spin-off costs— 227 51 457 
Non-GAAP operating income$39,794 $28,699 $73,008 $55,785 
GAAP operating margin18.4 %14.9 %18.2 %14.6 %
Non-GAAP operating margin33.3 %27.1 %31.3 %27.1 %
GAAP net income$9,455 $4,509 $16,911 $8,048 
Amortization of acquired technologies458 463 919 919 


Amortization of acquired intangibles15 10 29 574 
Stock-based compensation expense and related employer-paid payroll taxes12,164 12,034 25,131 22,650 
Transaction related costs4,919 (278)3,523 (9)
Restructuring costs and other259 409 885 1,036 
Spin-off costs— 227 51 457 
Tax benefits associated with above adjustments (1)(624)(1,112)(968)(2,439)
Non-GAAP net income$26,646 $16,262 $46,481 $31,236 
GAAP diluted earnings per share$0.05 $0.02 $0.09 $0.04 
Non-GAAP diluted earnings per share$0.14 $0.09 $0.25 $0.17 
    Shares used in computation of diluted earnings per share:187,274 185,643 187,560 184,732 
_________________
(1) The tax benefits associated with non-GAAP adjustments for the three and six months ended June 30, 2024, and 2023, respectively, is calculated utilizing the Company's individual statutory tax rates for each impacted subsidiary.



N-able, Inc.
Reconciliation of GAAP Net Income to Adjusted EBITDA
(In thousands)
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Net income $9,455 $4,509 $16,911 $8,048 
Amortization1,879 1,391 3,741 3,388 
Depreciation4,025 3,755 7,982 7,425 
Income tax expense6,060 4,799 11,759 9,372 
Interest expense, net7,606 7,530 15,227 14,730 
Unrealized foreign currency losses445 530 1,241 555 
Transaction related costs4,919 (278)3,523 (9)
Spin-off costs— 227 51 457 
Stock-based compensation expense and related employer-paid payroll taxes12,164 12,034 25,131 22,650 
Restructuring costs and other259 409 885 1,036 
Adjusted EBITDA$46,812 $34,906 $86,451 $67,652 
Adjusted EBITDA margin39.2 %32.9 %37.1 %32.9 %





N-able, Inc.
Reconciliation of GAAP Revenue to Non-GAAP Revenue on a Constant Currency Basis
(In thousands, except percentages)
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
20242023Growth Rate20242023Growth Rate
GAAP subscription revenue$117,413 $103,355 13.6 %$228,930 $200,797 14.0 %
Estimated foreign currency impact (1)
153 — 0.1 (58)— 0.0 
Non-GAAP subscription revenue on a constant currency basis$117,566 $103,355 13.7 %$228,872 $200,797 14.0 %
GAAP other revenue$2,034 $2,725 (25.4)%$4,266 $5,101 (16.4)%
Estimated foreign currency impact (1)
3 — 0.1 7 — 0.1 
Non-GAAP other revenue on a constant currency basis$2,037 $2,725 (25.2)%$4,273 $5,101 (16.2)%
GAAP subscription and other revenue$119,447 $106,080 12.6 %$233,196 $205,898 13.3 %
Estimated foreign currency impact (1)
156 — 0.1 (51)— — 
Non-GAAP subscription and other revenue on a constant currency basis$119,603 $106,080 12.7 %$233,145 $205,898 13.2 %
_________________
(1) The estimated foreign currency impact is calculated using the average foreign currency exchange rates in the comparable prior year monthly periods and applying those rates to foreign-denominated revenue in the corresponding monthly periods for the three and six months ended June 30, 2024.



N-able, Inc.
Reconciliation of Unlevered Free Cash Flow
(In thousands)
(Unaudited)

Three Months Ended June 30,Six Months Ended June 30,
2024202320242023
Net cash provided by operating activities$27,278 $20,726 $31,462 $31,357 
Purchases of property and equipment(3,242)(3,565)(6,680)(6,969)
Purchases of intangible assets(1,903)(2,458)(3,592)(4,669)
Free cash flow22,133 14,703 21,190 19,719 
Cash paid for interest, net of cash interest received7,292 7,014 14,562 13,703 
Cash paid for transaction related costs, restructuring costs, spin-off costs, employer-paid payroll taxes on stock awards and other one-time items6,029 1,895 6,981 4,052 
Unlevered free cash flow$35,454 $23,612 $42,733 $37,474 


v3.24.2.u1
COVER PAGE COVER PAGE
Aug. 08, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Aug. 08, 2024
Entity Registrant Name N-able, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-40297
Entity Tax Identification Number 85-4069861
Entity Address, Address Line One 30 Corporate Drive
Entity Address, Address Line Two Suite 400
Entity Address, City or Town Burlington
Entity Address, State or Province MA
Entity Address, Postal Zip Code 01803
City Area Code 781
Local Phone Number 328-6490
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.001 par value
Trading Symbol NABL
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001834488
Amendment Flag false
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