N-able: Fiscal 4Q22 Financial Results

N-able, Inc. (formerly SolarWinds MSP) reported results for its fourth quarter and full-year ended December 31, 2022.

“Last year illustrated the strength of our business model, as we delivered strong financial results, executed on our strategic initiatives to enhance our product portfolio and elevated our reputation as vendor of choice for the MSP market,” said president and CEO John Pagliuca. “In 2023, we intend to work with our partners to raise the bar and continue to provide them with the tools and services that they need to manage their small and medium enterprise customer environments, secure their endpoints and cloud assets, and grow their businesses and the value they provide in their markets. We are focused and inspired by our partners to innovate, guide, and empower them to achieve their business goals in 2023 and beyond.”

“For 4FQ22 and FY22 we exceeded both our revenue growth and adjusted EBITDA outlook, which we believe reflects the resilience of our market, the strength of our business model, and the mission-critical nature of the services our MSP Partners provide,” added EVP and CFO Tim O’Brien. “As we look ahead to 2023, we intend to continue to invest in enhancing our offerings, bringing new products to market, and executing on our go-to-market strategies to capitalize on our market opportunity in a profitable and sustainable manner.”

4FQ22 financial highlights:

• Total revenue of $95.8 million, representing approximately 7% Y/Y growth, or approximately 13% Y/Y growth on a constant currency basis.
• Subscription revenue of $93.4 million, representing approximately 7% Y/Y growth, or approximately 13% Y/Y growth on a constant currency basis.
• GAAP gross margin of 84.3% and non-GAAP gross margin of 85.0%.
• GAAP net income of $7.0 million, or $0.04 per diluted share, and non-GAAP net income of $18.0 million, or $0.10 per diluted share.
• Adjusted EBITDA of $31.2 million, representing an adjusted EBITDA margin of 32.6%.

FY22 financial highlights:

• Total revenue of $371.8 million, representing approximately 7% Y/Y growth, or approximately 13% Y/Y growth on a constant currency basis.
• Subscription revenue of $362.6 million, representing approximately 8% Y/Y growth, or approximately 13% Y/Y growth on a constant currency basis.
• GAAP gross margin of 84.2% and non-GAAP gross margin of 85.2%.
• GAAP net income of $16.7 million, or $0.09 per diluted share, and non-GAAP net income of $61.8 million, or $0.34 per diluted share.
• Adjusted EBITDA of $114.7 million, representing an adjusted EBITDA margin of 30.9%.

Additional highlight for 4FQ22 include:
N-able hosted its first in-person distributor conference since before the Covid-19 pandemic in Salzburg, Austria, as it continues to expand its distribution landscape across Latin America, Europe, and the Middle East, bringing the total number of distributors to over 80, spanning across 50 countries and reaching around 6,500 MSPs and IT resellers.

Balance Sheet
At December 31, 2022, total cash and cash equivalents were $98.8 million and total debt, net of debt issuance costs, was $337.0 million.

Financial Outlook for 1FQ23
Total revenue in the range of $97.5 to $98.0 million, representing approximately 7% to 8% Y/Y growth, or approximately 11% to 12% growth on a constant currency basis. Adjusted EBITDA in the range of $29.0 to $29.5 million, representing approximately 30% of total revenue.

Financial Outlook for FY23
Total revenue in the range of $408 to $412 million, representing 10% to 11% Y/Y growth, or 11% to 12% Y/Y growth on a constant currency basis. Adjusted EBITDA in the range of $122 to $126 million, representing approximately 30% to 31% of total revenue.