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 38.5%–39%.

• Net income for Q3 2024 was $10.8 million, up from $6.0 million in Q3 2023, reflecting higher revenue and lower expenses.

• Over 50% of monthly recurring revenue is under long-term contracts, with 2,275 MSP partners generating $50,000+ ARR, representing 57% of total ARR.

• Cove became the largest recurring revenue product group, with major enhancements in backup speed and compliance.

Financial highlights

• Subscription revenue was $115 million, up 9% year-over-year; other revenue was $1.4 million, down 38.8%.

• Gross margin was 83.7% (non-GAAP), with GAAP gross margin at 82.9%.

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

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

• Cash and cash equivalents were $174.4 million as of September 30, 2024.

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

• Management expects continued investment in product development and security enhancements, with a focus on long-term contracts.

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