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01/10 16:58
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects a mixed sentiment. While financial performance shows solid growth with a 10% revenue increase and positive EBITDA margins, concerns arise from declining gross margins, regulatory challenges, and economic headwinds. The lack of a shareholder return plan and significant debt also weigh negatively. However, the optimistic guidance and positive reception of the Adlumin acquisition balance these concerns. Given the company's market cap, the stock is likely to remain stable, resulting in a neutral prediction for the next two weeks.
Q4 2024 Total Revenue $116.5 million, representing 7% year-over-year growth on a reported and constant currency basis.
Q4 2024 Subscription Revenue $115 million, representing approximately 8% year-over-year growth on a reported and constant currency basis.
Q4 2024 Adjusted EBITDA $38.1 million, representing a 32.7% adjusted EBITDA margin.
Full Year 2024 Total Revenue $466 million, representing year-over-year growth of 10% on both a reported and constant currency basis.
Full Year 2024 Subscription Revenue $459 million, growing approximately 11% year-over-year on both a reported and constant currency basis.
Full Year 2024 Adjusted EBITDA $169.4 million, representing an adjusted EBITDA margin of 36.3%.
Q4 2024 Gross Margin 82.3%, compared to 84.5% in the fourth quarter of 2023.
Full Year 2024 Gross Margin 83.8%, compared to 84.6% in 2023.
Q4 2024 Unlevered Free Cash Flow $29 million.
Full Year 2024 Unlevered Free Cash Flow $98.7 million.
Q4 2024 Non-GAAP EPS $0.10.
Full Year 2024 Non-GAAP EPS $0.48.
Q4 2024 Customers with $50,000+ ARR 2,349 customers, up approximately 7% year-over-year.
Dollar-Based Net Revenue Retention Approximately 103% on both a reported and constant currency basis.
Q4 2024 Cash and Equivalents $85 million.
Outstanding Loan Principal Balance $339 million, representing net leverage of approximately 1.5x based on trailing 12-month EBITDA.
New Product Launch: The successful launch of XDR, in partnership with Adlumin, became the fastest-growing SKU and largest pipeline generator in fiscal year 2024.
Acquisition: N-able acquired Adlumin, enhancing its product suite with a cloud-native AI-powered XDR platform.
Data Protection Innovation: Introduced immutable backups and AI-enhanced restore capabilities, achieving over 95% restore accuracy.
UEM Enhancements: Launched an AI-powered developer portal to accelerate API integrations, improving IT and security service delivery.
Market Expansion: The acquisition of Adlumin allows N-able to expand beyond the MSP market into the mid-market and reseller channels.
Geographic Expansion: Plans to replicate reseller channel success in international markets such as the U.K., DACH, and Australia.
Operational Efficiency: Transitioned from less than 10% to over 50% of revenue from annual contracts, enhancing customer relationships.
Customer Base Growth: Increased customers contributing $50,000 or more of ARR by approximately 7% year-over-year.
Strategic Objectives: Focused on security leadership, scaling go-to-market efforts, and elevating customer experience.
Future Growth Strategy: Plans to leverage Adlumin's reseller relationships to enhance the adoption of security solutions.
Competitive Pressures: N-able faces competitive pressures in the cybersecurity market, particularly with the introduction of their XDR and MDR solutions. The need for differentiation in a crowded market is critical as they aim to establish a strong foothold against established players.
Regulatory Issues: The company acknowledges potential regulatory challenges that could arise from their operations, particularly in the context of cybersecurity and data protection, which are subject to evolving regulations.
Supply Chain Challenges: There are concerns regarding supply chain challenges that could impact the delivery of their software solutions, especially as they expand their product offerings and integrate new acquisitions.
Economic Factors: The global economic environment poses risks, including fluctuations in foreign exchange rates, which could affect revenue growth and profitability. The company anticipates a revenue growth rate headwind due to these economic factors.
Integration Risks: The integration of Adlumin presents risks, including potential disruptions to operations and the challenge of aligning different corporate cultures and systems.
Revenue Recognition Timing: N-able expects transitory lumpiness in revenue due to the timing of their long-term contract initiative, which could impact financial performance in the short term.
Debt Management: The company has a significant outstanding loan principal balance, which could pose risks if interest rates rise, affecting their financial stability.
Strategic Objectives: N-able set three strategic objectives for 2024: 1) Provide leading security and data protection solutions for SMBs and mid-market businesses; 2) Drive rapid innovation in Unified Endpoint Management (UEM); 3) Enhance engagement model to deliver differentiated service.
Acquisition of Adlumin: N-able acquired Adlumin, enhancing its security offerings and expanding its market reach beyond MSPs to resellers, which is expected to drive growth.
Product Innovations: Introduced immutable backups and AI-enhanced restore capabilities in Cove, and launched an AI-powered developer portal for faster IT service delivery.
Go-to-Market Strategy: Transitioned from less than 10% to over 50% of revenue from annual contracts, enhancing customer relationships and retention.
Customer Experience: Investing in tailored support for higher-value accounts to improve customer experience and service.
2025 Revenue Guidance: Expect total revenue of $486.5 million to $492.5 million, representing 4% to 6% year-over-year growth.
2025 ARR Guidance: Expect ARR in the range of $514 million to $522 million, representing 7% to 8% year-over-year growth.
2025 Adjusted EBITDA Guidance: Expect adjusted EBITDA in the range of $132 million to $138 million, representing approximately 27% to 28% margin.
CapEx Guidance: Expect CapEx to be approximately 6% of revenue for 2025.
Interest Expense: Anticipate approximately $27 million in interest expense for the full year 2025.
Shareholder Return Plan: N-able did not announce any share buyback program or dividend program during the earnings call.
The earnings call reflects positive sentiment with strong subscription revenue growth, increased customer base, and healthy cash flow. While gross margins declined slightly, the company is investing in AI and operations, indicating future growth potential. The Q&A section highlights confidence in ARR growth, successful acquisitions, and strategic product launches, all contributing to an optimistic outlook. The market cap suggests moderate stock price movement, leading to a positive prediction.
The earnings call indicates strong financial performance with a 14% ARR growth and a 10% revenue increase. Despite a slight decline in gross margin, the company maintains a high adjusted EBITDA margin and positive free cash flow. The Q&A section reveals positive market reception and strategic focus, with promising growth in MSP markets and new product bundles. The share repurchase program further boosts confidence. Given the market cap, the stock is expected to react positively, likely within the 2% to 8% range, reflecting the overall strong financial and strategic outlook.
The earnings call reflects a mixed sentiment. While financial performance shows solid growth with a 10% revenue increase and positive EBITDA margins, concerns arise from declining gross margins, regulatory challenges, and economic headwinds. The lack of a shareholder return plan and significant debt also weigh negatively. However, the optimistic guidance and positive reception of the Adlumin acquisition balance these concerns. Given the company's market cap, the stock is likely to remain stable, resulting in a neutral prediction for the next two weeks.
The earnings call summary shows mixed signals: strong revenue growth and optimistic guidance, yet declining gross margins and integration risks. The Q&A reveals potential headwinds and lack of clarity on key initiatives, which may cause investor caution. The company's market cap suggests moderate stock price sensitivity. Overall, the sentiment is neutral, with no strong catalysts to drive significant price movement.
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