NABL — N-able, Inc.

N-able Q3 2025 Earnings Call Summary

1. Key Financial Results and Metrics:

• Annual Recurring Revenue (ARR): $528 million, up 14% year-over-year.
• Total Revenue: $131.7 million, exceeding guidance by $3.7 million, representing a 13% year-over-year growth.
• Subscription Revenue: $130.5 million, also reflecting a 13% year-over-year growth.
• Adjusted EBITDA: $41.4 million, with an adjusted EBITDA margin of 31.4%.
• Gross Margin: 81.1%, down from 83.7% in the previous year.
• Dollar-Based Net Revenue Retention (NRR): Approximately 102%, indicating improved customer retention.
• Unlevered Free Cash Flow: $22.6 million.
• Net Leverage: Approximately 1.5x with $101 million in cash and $336 million in outstanding loans.

2. Strategic Updates and Business Highlights:

• N-able is enhancing its cybersecurity offerings, particularly focusing on AI integration across its platform, which is seen as essential for addressing evolving cyber threats.
• The company launched Anomaly Detection as a Service, enhancing its data protection capabilities and shifting from reactive to proactive defense.
• N-able's Unified Endpoint Management (UEM) solution has gained traction, with significant wins in the mid-market segment.
• The company is expanding its channel partnerships, particularly in the U.K., and reported strong engagement with top-tier partners.
• The acquisition of Adlumin is performing well, with successful cross-selling into the existing customer base.

3. Forward Guidance and Outlook:

• For Q4 2025, N-able expects total revenue between $126.5 million and $127.5 million, representing approximately 9% year-over-year growth.
• Full-year 2025 revenue outlook raised to approximately $507.7 million to $508.7 million, indicating 9% growth.
• Full-year ARR outlook adjusted to $530 million to $531 million, reflecting 10% growth.
• Adjusted EBITDA for the full year expected to be between $148.2 million and $149.2 million, with a margin of 29%.
• The company aims to return to a 30% adjusted EBITDA margin in FY 2026 while balancing investments in AI and growth.

4. Bad News, Challenges, or Points of Concern:

• Gross margin decreased from the previous year, indicating potential cost pressures.
• The company is facing currency headwinds that could impact future revenue growth.
• The competitive landscape in cybersecurity is intensifying, with increasing threats and regulatory pressures, which may require ongoing investment and innovation.
• While NRR has improved, there are concerns about sustaining this momentum amid a rapidly evolving market.

5. Notable Q&A Insights:

• Management expressed confidence that NRR bottomed in Q1 and is on an upward trajectory due to successful integration of the Adlumin acquisition and improved gross retention rates.
• The impact of the Adlumin acquisition on ARR growth was quantified at 4% to 5%, with expectations for continued growth in the second half of the year.
• The introduction of new AI-driven offerings is seen as both an upsell opportunity and a critical factor for initial customer adoption.
• Management highlighted the importance of establishing industry standards in AI to enhance customer trust and operational efficiency.

Overall, N-able's Q3 2025 performance reflects strong growth and strategic positioning in the cybersecurity market, albeit with some challenges related to margins and competitive pressures. The focus on AI integration is a key part of their strategy moving forward.