N-able, Inc. Q1 FY2025 earnings call

Security Initiatives - Released breach prevention from Microsoft 365 to address identity attack vectors for customers. - Launched Vulnerability Management as a built-in feature in UEM, addressing a key customer pain point of disparate tools. - Improved Cove data protection with 20% faster Microsoft domain backups. ### Go-to-Market Expansion - Broadened channel approach to include resellers, system integrators, and distributors, revamped partner portal, and hosted events. - Committed to CMMC 2.0 readiness to appeal to regulated sectors. ### Customer Expansion - Leveraging a $2.5 billion cross-sell opportunity within existing customer base. - Secured large new deals, including a significant win with a consortium of school systems. ### Awards and Recognition - Cove named Champion in Managed BDR for the second consecutive year. - Adlumin named market leader for MDR in 2025 Cyber Defense Magazine Global InfoSec Awards.

First quarter ARR grew 11% year-over-year in constant currency. First quarter revenue was $118.2 million, and adjusted EBITDA was $31.6 million, reflecting a 27% margin. Subscription revenue was $116.8 million. Dollar-based net revenue retention, calculated on a trailing 12-month basis, was approximately 101% on both reported and constant currency basis. Approximately 43% of revenue was outside of North America in the quarter.

Second Quarter 2025 - Expected total revenue in range of $125.5M to $126.5M (5%-6% Y/Y growth). - Expected adjusted EBITDA in range of $34M to $35M (27%-28% margin). ### Full Year 2025 - Raised total revenue guidance to $492M - $497M (6%-7% Y/Y growth, 6%-8% constant currency). - Raised ARR guidance to $519M - $525M (8%-9% Y/Y growth, 7%-9% constant currency). - Raised adjusted EBITDA outlook to $134M - $139M (27%-28% margin). - CapEx expected ~6% of total revenue. - Adjusted EBITDA to unlevered free cash flow conversion expected ~68% for full year.

• Evolving trade policies creating uncertainty in the macro environment. - Persistent cyber threats posing challenges to business operations.

Q: How much did Adlumin contribute to revenue growth or ARR?

A: Adlumin acquisition had ~$21M of ARR at acquisition, recognized ratably.

Q: Any considerations for seasonality in ARR?

A: Expect ARR sequential growth to build throughout 2025 with slight improvement.

Q: View on market spending environment?

A: Demand for cyber-resiliency remains strong, though some deals take longer.

Q: Dollar-based net retention and pricing?

A: Expected to be in trough, gross retention steady, pricing ~1%-2% in 2025.

Q: Reseller traction and VM management success?

A: Reseller motion in early innings with green shoots, VM management a differentiator in UEM with strong early traction.

Q: EBITDA margins outlook?

A: Focused on growth in 2025, expecting low-30s margins in 2026.

Q: Revenue guide change and customer expansion?

A: Q1 revenue beat had FX and 606 impacts, customer expansion via bundling and packaging to drive ARR and NRR.

Q: Adlumin traction and platform integration?

A: Adlumin resonates due to blue ocean market, MSPs lacking XDR/MDR solutions; platform integration focuses on automating workflows for efficiency.

Q: 606 impact, LTC contracts, unlevered free cash flow?

A: 606 impact consistent, north of 50% of customers on longer term contracts, unlevered free cash flow conversion bump due to lower tax rate from Adlumin acquisition.