N-able, Inc. Reports Strong Earnings and Growth Prospects

N-Able, Inc. ((NABL)) has held its Q2 earnings call. Read on for the main highlights of the call.

The recent earnings call for N-able, Inc. reflected a positive sentiment overall, driven by notable achievements such as surpassing $500 million in Annual Recurring Revenue (ARR) and maintaining strong profitability metrics. The company celebrated successful product performances, particularly with Cove, although it acknowledged challenges like a decline in gross margins and slower growth in the end-device management segment. Additionally, the impact of foreign exchange rates on revenue highlighted some external dependencies that the company faces.

Achievement of $500 Million ARR

N-able proudly announced that it surpassed $500 million in Annual Recurring Revenue (ARR), marking a significant milestone with a 14% year-over-year growth. This achievement underscores the company’s robust revenue-generating capabilities and its strong position in the market.

Strong Adjusted EBITDA Margin

The company reported a commendable 32% adjusted EBITDA margin, highlighting its strong profitability. This metric is indicative of N-able’s efficient operational management and its ability to maintain a healthy bottom line.

Cove Data Protection Success

Cove, one of N-able’s flagship products, recorded its highest bookings quarter and highest net new ARR quarter ever, showing an impressive 25% year-over-year ARR growth. This success demonstrates the product’s growing acceptance and effectiveness in the market.

Expansion of Channel Strategy

N-able doubled its reseller pipeline quarter-over-quarter, signaling strong potential for future growth. This expansion of its channel strategy is expected to bolster the company’s market reach and enhance its revenue streams.

Strong Revenue Results

The company achieved total revenue of $131.2 million, which was $4.7 million above the high-end guidance, reflecting a 10% year-over-year growth. This result showcases N-able’s ability to exceed expectations and deliver strong financial performance.

Gross Margin Decline

Despite the positive revenue results, N-able experienced a decline in gross margin, which fell to 81.8% from 84.7% in the same period in 2024. This decline points to potential cost pressures or changes in the company’s cost structure.

Challenges in End-Device Management

The company reported more flattish growth in the end-device management segment compared to previous quarters. This indicates a slowdown in this area, which may require strategic adjustments to reignite growth.

Currency Exchange Rate Impact

Approximately half of the revenue outperformance was attributed to favorable foreign exchange rates, highlighting the company’s reliance on currency fluctuations. This factor underscores the importance of monitoring external economic conditions.

Forward-Looking Guidance

Looking ahead, N-able provided guidance that reflects continued growth and strategic advancements. The company set its full-year 2025 revenue guidance at $500 million to $503 million, anticipating a 7% to 8% growth rate. Additionally, it raised its full-year ARR outlook to $525 million to $530 million, indicating a 9% to 10% growth. N-able also projected an adjusted EBITDA margin of 28% to 29% for the year, with a strategic focus on expanding its presence in the mid-market and enhancing its channel initiatives.

In summary, N-able’s earnings call highlighted a positive trajectory with significant achievements in revenue growth and profitability. Despite some challenges, the company’s strategic initiatives and forward-looking guidance suggest a promising outlook. Investors and stakeholders can take confidence in N-able’s ability to navigate market dynamics and continue its growth momentum.