0001834488False00018344882024-02-222024-02-22

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
February 22, 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 February 22, 2024, N-able, Inc. (“N-able”) issued a press release regarding, and will hold a conference call announcing, its financial results for the fourth quarter and fiscal year ended December 31, 2023. 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:February 22, 2024By:/s/ Tim O'Brien
Tim O'Brien
Chief Financial Officer



Exhibit 99.1
n-ablelogoa.jpg
N-able Announces Fourth Quarter and Full-Year 2023 Results

Full-Year 2023 Revenue Increased 13.5% Year-Over-Year

TTM Dollar-Based Net Retention Rate of 110%

Full-Year 2024 Revenue Outlook of 9% to 10% Year-Over-Year Growth

Full-Year 2024 Adjusted EBITDA Margin Outlook of 34% to 35%

BURLINGTON, Massachusetts - February 22, 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 fourth quarter and full-year ended December 31, 2023.

“Our 2023 performance was strong, and we believe lays the groundwork for a successful 2024,” said N-able president and CEO John Pagliuca. “Demand for effective IT management software has remained robust, with increasing security threats, intensifying compliance standards, and rising IT complexity challenging MSPs and SMEs across the globe. With our expanding suite of purpose-built software products - including the recent additions of MDR and Cloud Commander - N-able is poised to meet these needs. We have high ambitions in 2024 and are determined to deliver for our customers and stakeholders.”

“Our fourth quarter results exceeded expectations on the top and bottom lines capping a successful year where we advanced our product roadmap, expanded our cross-sell opportunity, and drove double digit revenue growth while growing our full-year adjusted EBITDA margin by over 300 basis points,” added N-able CFO Tim O’Brien. “Our 2024 operating plan builds on this momentum and we believe positions us to advance critical strategic initiatives as we aim to achieve a sustained Rule of 50 performance goal.”

Fourth quarter 2023 financial highlights:

•Total revenue of $108.4 million, representing 13.2% year-over-year growth, or 11.4% year-over-year growth on a constant currency basis.
•Subscription revenue of $106.1 million, representing 13.6% year-over-year growth, or 11.7% year-over-year growth on a constant currency basis.
•GAAP gross margin of 83.7% and non-GAAP gross margin of 84.5%.
•GAAP net income of $9.4 million, or $0.05 per diluted share, and non-GAAP net income of $19.8 million, or $0.11 per diluted share.
•Adjusted EBITDA of $39.2 million, up 25.7% year-over-year, representing an adjusted EBITDA margin of 36.2%.

Full-year 2023 financial highlights:

•Total revenue of $421.9 million, representing 13.5% year-over-year growth on both a reported and constant currency basis.
•Subscription revenue of $412.1 million, representing 13.6% year-over-year growth, or 13.7% year-over-year growth on a constant currency basis.
•GAAP gross margin of 83.8% and non-GAAP gross margin of 84.6%.
•GAAP net income of $23.4 million, or $0.13 per diluted share, and non-GAAP net income of $68.2 million, or $0.37 per diluted share.
•Adjusted EBITDA of $143.4 million, up 25.0% year-over-year, representing an adjusted EBITDA margin of 34.0%.

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

Additional highlights for the fourth quarter of 2023 include:

•N-able Advances Security Suite with Introduction of N-able Managed Detection and Response. N-able MDR combines a powerful security operations platform with expert services, giving managed services providers (MSPs) a broad range of capabilities to set a new standard of cybersecurity for their small and mid-sized customers.


•N-able Enhances Device Management Capabilities Through Automation with Generative AI. These new capabilities help MSPs to automate creation of scripts based on prompts and provide tools to leverage machine learnings to automate mundane tasks.
•N-able Awarded 2023 ChannelPro SMB All-Star Award. N-able was celebrated for recognizing the role MSPs play in delivering infrastructure-as-a-service with hyperscalers. ChannelPro specifically commended N-able for critical updates made to Cove, N-able's cloud-first data protection product.

Balance Sheet

As of December 31, 2023, total cash and cash equivalents were $153.0 million and total debt, net of debt issuance costs, was $335.0 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 annual report on Form 10-K 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 February 22, 2024, N-able is providing its financial outlook for the first 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, acquisition 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 First Quarter of 2024

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

•Total revenue in the range of $111.0 to $111.5 million, representing approximately 11% to 12% year-over-year growth on both a reported and constant currency basis.
•Adjusted EBITDA in the range of $37.5 to $38.0 million, representing approximately 34% 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 $460.0 to $465.0 million, representing approximately 9% to 10% year-over-year growth, or 9% to 11% on a constant currency basis.
•Adjusted EBITDA in the range of $158.0 to $162.0 million, representing approximately 34% to 35% 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 February 22, 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 first 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 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 discussed in N-able’s Annual Report on Form 10-K for the year ended December 31, 2022, that N-able filed with the SEC on March 14, 2023, and those that will be discussed in the Annual Report on Form 10-K for the period ended December 31, 2023, that N-able anticipates filing on or before 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, acquisition 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.
•Acquisition Related Costs. We exclude certain expense items resulting from acquisitions, 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, acquisitions 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 acquisition 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 less acquisitive peer companies, 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, acquisition 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, acquisition-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)

December 31,
20232022
Assets
Current assets:
Cash and cash equivalents$153,048 $98,847 
Accounts receivable, net of allowances of $1,171 and $1,330 as of December 31, 2023 and 2022, respectively40,013 34,798 
Income tax receivable8,001 7,814 
Prepaid and other current assets23,729 12,697 
Total current assets224,791 154,156 
Property and equipment, net36,838 37,404 
Operating lease right-of-use assets32,067 31,752 
Deferred taxes1,087 795 
Goodwill838,497 828,795 
Intangible assets, net6,717 8,873 
Other assets, net22,794 17,082 
Total assets$1,162,791 $1,078,857 
Liabilities and stockholders' equity
Current liabilities:
Accounts payable$5,239 $3,544 
Accrued liabilities and other49,366 35,630 
Current operating lease liabilities6,443 5,771 
Income taxes payable4,523 1,629 
Current portion of deferred revenue12,646 11,740 
Current debt obligation3,500 3,500 
Total current liabilities81,717 61,814 
Long-term liabilities:
Deferred revenue, net of current portion167 387 
Non-current deferred taxes1,820 2,783 
Non-current operating lease liabilities33,064 33,110 
Long-term debt, net of current portion331,509 333,488 
Other long-term liabilities3,154 5,204 
Total liabilities451,431 436,786 
Commitments and contingencies (Note 15)
Stockholders’ equity:
Common stock, $0.001 par value: 550,000,000 shares authorized and 183,220,689 and 180,849,537 shares issued and outstanding as of December 31, 2023 and 2022, respectively183 181 
Preferred stock, $0.001 par value: 50,000,000 shares authorized and no shares issued and outstanding as of December 31, 2023 and 2022, respectively— — 
Additional paid-in capital666,522 632,871 
Accumulated other comprehensive income (loss)4,409 (7,815)
Retained earnings40,246 16,834 
Total stockholders' equity711,360 642,071 
Total liabilities and stockholders' equity$1,162,791 $1,078,857 




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

Three Months Ended December 31,Twelve Months Ended December 31,
2023202220232022
Revenue:
Subscription and other revenue$108,415 $95,755 $421,880 $371,769 
Cost of revenue:
Cost of revenue17,164 14,641 66,369 56,133 
Amortization of acquired technologies457 434 1,839 2,477 
Total cost of revenue17,621 15,075 68,208 58,610 
Gross profit90,794 80,680 353,672 313,159 
Operating expenses:
Sales and marketing33,579 31,078 134,691 125,301 
Research and development19,384 16,820 78,180 63,484 
General and administrative 16,008 17,006 69,885 71,125 
Amortization of acquired intangibles12 1,467 597 5,853 
Total operating expenses68,983 66,371 283,353 265,763 
Operating income21,811 14,309 70,319 47,396 
Other expense:
Interest expense, net(7,720)(6,393)(30,252)(18,852)
Other income, net2,690 2,442 4,259 1,881 
Total other expense, net(5,030)(3,951)(25,993)(16,971)
Income before income taxes16,781 10,358 44,326 30,425 
Income tax expense7,430 3,373 20,914 13,718 
Net income $9,351 $6,985 $23,412 $16,707 
Net income per share:
    Basic earnings per share$0.05 $0.04 $0.13 $0.09 
    Diluted earnings per share$0.05 $0.04 $0.13 $0.09 
Weighted-average shares used to compute net income per share:
    Shares used in computation of basic earnings per share:183,072 180,712 182,371 180,136 
    Shares used in computation of diluted earnings per share:186,495 182,162 185,980 181,297 



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

Three Months Ended December 31,Twelve Months Ended December 31,
2023202220232022
Cash flows from operating activities
Net income$9,351 $6,985 $23,412 $16,707 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization5,481 6,170 21,623 24,440 
Benefit from doubtful accounts(546)(461)(159)(323)
Stock-based compensation expense10,677 8,449 43,570 36,527 
Deferred taxes350 (1,636)330 (1,423)
Amortization of debt issuance costs404 404 1,601 1,623 
Operating lease right-of-use assets, net(500)(15)(1,550)(1,168)
(Gain) loss on foreign currency exchange rates(1,779)(2,135)358 (1,246)
Gain on contingent consideration(485)(249)(1,443)(83)
Other non-cash expenses92 105 220 148 
Changes in operating assets and liabilities, net of assets acquired and liabilities assumed in business combinations:
Accounts receivable(939)(3,710)(7,060)(3,432)
Income tax receivable8,700 2,235 (174)(567)
Prepaid expenses and other assets(2,802)680 (10,823)283 
Accounts payable1,451 813 1,833 (1,624)
Due to and from affiliates— — — (402)
Accrued liabilities and other7,381 (123)16,065 3,003 
Income taxes payable(6,525)(278)2,966 (3,188)
Deferred revenue1,127 865 684 1,358 
Other long-term assets(68)299 (1,274)780 
Other long-term liabilities(150)— (90)— 
Net cash provided by operating activities31,220 18,398 90,089 71,413 
Cash flows from investing activities
Purchases of property and equipment(3,293)(3,144)(13,780)(12,834)
Purchases of intangible assets(1,881)(4,664)(8,556)(8,176)
Acquisitions, net of cash acquired— 103 — (9,199)
Net cash used in investing activities(5,174)(7,705)(22,336)(30,209)
Cash flows from financing activities
Payments of tax withholding obligations related to restricted stock units(1,748)(1,972)(11,976)(8,325)
Exercise of stock options— 77 72 108 
Proceeds from issuance of common stock under employee stock purchase plan— — 1,681 1,315 
Deferred acquisition payments(600)— (1,450)— 
Repayments of borrowings from Credit Agreement(875)(875)(3,500)(3,500)
Net cash used in financing activities(3,223)(2,770)(15,173)(10,402)
Effect of exchange rate changes on cash and cash equivalents2,792 3,195 1,621 1,309 
Net increase in cash and cash equivalents25,615 11,118 54,201 32,111 
Cash and cash equivalents
Beginning of period127,433 87,729 98,847 66,736 
End of period$153,048 $98,847 $153,048 $98,847 
Supplemental disclosure of cash flow information:
Cash paid for interest$7,318 $5,322 $28,437 $15,570 
Cash paid for income taxes$3,888 $3,146 $14,934 $16,303 
Supplemental disclosure of non-cash activities:
Change in purchases of property, equipment and leasehold improvements included in accounts payable and accrued expenses$175 $(156)$(378)$(728)
Right-of-use assets obtained in exchange for operating lease liabilities$2,805 $— $5,123 $967 



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

Three Months Ended December 31,Twelve Months Ended December 31,
2023202220232022
GAAP cost of revenue$17,621 $15,075 $68,208 $58,610 
Stock-based compensation expense and related employer-paid payroll taxes(363)(263)(1,434)(1,218)
Amortization of acquired technologies(457)(434)(1,839)(2,477)
Restructuring costs and other(36)(20)(74)(61)
Non-GAAP cost of revenue$16,765 $14,358 $64,861 $54,854 
GAAP gross profit$90,794 $80,680 $353,672 $313,159 
Stock-based compensation expense and related employer-paid payroll taxes363 263 1,434 1,218 
Amortization of acquired technologies457 434 1,839 2,477 
Restructuring costs and other36 20 74 61 
Non-GAAP gross profit$91,650 $81,397 $357,019 $316,915 
GAAP sales and marketing expense$33,579 $31,078 $134,691 $125,301 
Stock-based compensation expense and related employer-paid payroll taxes(3,715)(2,919)(15,287)(12,500)
Acquisition related costs4 (3)(24)(21)
Restructuring costs and other(263)(429)(290)(441)
Non-GAAP sales and marketing expense$29,605 $27,727 $119,090 $112,339 
GAAP research and development expense$19,384 $16,820 $78,180 $63,484 
Stock-based compensation expense and related employer-paid payroll taxes(2,225)(1,463)(8,995)(6,400)
Acquisition related costs— (16)(8)(48)
Restructuring costs and other(87)(678)(926)(1,028)
Non-GAAP research and development expense$17,072 $14,663 $68,251 $56,008 
GAAP general and administrative expense$16,008 $17,006 $69,885 $71,125 
Stock-based compensation expense and related employer-paid payroll taxes(4,565)(4,033)(19,377)(17,540)
Acquisition related costs474 236 1,128 (220)
Restructuring costs and other(109)(555)(823)(1,132)
Spin-off costs(112)(268)(735)(1,616)
Non-GAAP general and administrative expense$11,696 $12,386 $50,078 $50,617 
GAAP operating income$21,811 $14,309 $70,319 $47,396 
Amortization of acquired technologies457 434 1,839 2,477 
Amortization of acquired intangibles12 1,468 597 5,854 
Stock-based compensation expense and related employer-paid payroll taxes10,868 8,678 45,093 37,658 
Acquisition related costs(478)(217)(1,096)289 
Restructuring costs and other495 1,682 2,113 2,662 
Spin-off costs112 268 735 1,616 
Non-GAAP operating income$33,277 $26,622 $119,600 $97,952 
GAAP operating margin20.1 %14.9 %16.7 %12.7 %
Non-GAAP operating margin30.7 %27.8 %28.3 %26.3 %
GAAP net income$9,351 $6,985 $23,412 $16,707 
Amortization of acquired technologies457 434 1,839 2,477 
Amortization of acquired intangibles12 1,468 597 5,854 


Stock-based compensation expense and related employer-paid payroll taxes10,868 8,678 45,093 37,658 
Acquisition related costs(478)(217)(1,096)289 
Restructuring costs and other495 1,682 2,113 2,662 
Spin-off costs112 268 735 1,616 
Tax benefits associated with above adjustments (1)(992)(1,332)(4,472)(5,430)
Non-GAAP net income$19,825 $17,966 $68,221 $61,833 
GAAP diluted earnings per share$0.05 $0.04 $0.13 $0.09 
Non-GAAP diluted earnings per share$0.11 $0.10 $0.37 $0.34 
    Shares used in computation of diluted earnings per share:186,495 182,162 185,980 181,297 
_________________
(1) The tax benefits associated with non-GAAP adjustments for the three and twelve months ended December 31, 2023, and 2022, 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 December 31,Twelve Months Ended December 31,
2023202220232022
Net income $9,351 $6,985 $23,412 $16,707 
Amortization1,571 2,643 6,396 11,191 
Depreciation3,910 3,527 15,227 13,249 
Income tax expense7,430 3,373 20,914 13,718 
Interest expense, net7,720 6,393 30,252 18,852 
Unrealized foreign currency (gains) losses(1,779)(2,135)358 (1,246)
Acquisition related costs(478)(217)(1,096)289 
Spin-off costs112 268 735 1,616 
Stock-based compensation expense and related employer-paid payroll taxes10,868 8,678 45,093 37,658 
Restructuring costs and other495 1,682 2,113 2,662 
Adjusted EBITDA$39,200 $31,197 $143,404 $114,696 
Adjusted EBITDA margin36.2 %32.6 %34.0 %30.9 %





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

Three Months Ended December 31,Twelve Months Ended December 31,
20232022Growth Rate20232022Growth Rate
GAAP subscription revenue$106,067 $93,392 13.6 %$412,072 $362,609 13.6 %
Estimated foreign currency impact (1)
(1,726)— (1.9)166 — 0.1 
Non-GAAP subscription revenue on a constant currency basis$104,341 $93,392 11.7 %$412,238 $362,609 13.7 %
GAAP other revenue$2,348 $2,363 (0.7)%$9,808 $9,160 7.1 %
Estimated foreign currency impact (1)
(1)— — 52 — 0.5 
Non-GAAP other revenue on a constant currency basis$2,347 $2,363 (0.7)%$9,860 $9,160 7.6 %
GAAP subscription and other revenue$108,415 $95,755 13.2 %$421,880 $371,769 13.5 %
Estimated foreign currency impact (1)
(1,727)— (1.8)218 — — 
Non-GAAP subscription and other revenue on a constant currency basis$106,688 $95,755 11.4 %$422,098 $371,769 13.5 %
_________________
(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 in the three and twelve months ended December 31, 2023.



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

Three Months Ended December 31,Twelve Months Ended December 31,
2023202220232022
Net cash provided by operating activities$31,220 $18,398 $90,089 $71,413 
Purchases of property and equipment(3,293)(3,144)(13,780)(12,834)
Purchases of intangible assets(1,881)(4,664)(8,556)(8,176)
Free cash flow26,046 10,590 67,753 50,403 
Cash paid for interest, net of cash interest received7,318 5,322 28,437 15,570 
Cash paid for acquisition related costs, restructuring costs, spin-off costs, employer-paid payroll taxes on stock awards and other one-time items1,243 1,677 6,128 8,881 
Unlevered free cash flow$34,607 $17,589 $102,318 $74,854 


v3.24.0.1
COVER PAGE COVER PAGE
Feb. 22, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Feb. 22, 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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