Breaking Down N-able, Inc. (NABL) Financial Health: Key Insights for Investors

As an investor, are you keeping a close watch on the financial health of N-able, Inc. (NABL)? With a reported total revenue of $466.1 million for the full year 2024, representing a 10.5% year-over-year growth, and subscription revenue reaching $459.0 million, showing an 11.4% increase, it's crucial to understand the key metrics driving this performance. How does N-able's debt of $333.6 million and cash reserves of $174.4 million impact its financial flexibility, and what does its impressive gross margin of 82.7% reveal about its profitability? Dive in to explore these insights and more, ensuring you're well-informed about N-able's financial standing and future prospects.

N-able, Inc. (NABL) Revenue Analysis

Understanding N-able, Inc.'s revenue streams involves looking at its primary revenue sources, year-over-year growth, the contribution of different business segments, and any significant changes in these areas.

Here's a breakdown:

• Primary Revenue Sources: N-able, Inc. generates revenue primarily through software subscriptions and related services aimed at IT service providers. These solutions encompass security, data protection, and unified endpoint management.
• Exploring N-able, Inc. (NABL) Investor Profile: Who’s Buying and Why?

N-able's revenue is derived from:

• Subscription Services: Recurring revenue from software subscriptions forms a significant portion. In 2024, subscription revenue reached $459.0 million.
• As-a-Service Offerings: This includes data protection and security-as-a-service, which are increasingly important for IT service providers.

Year-over-Year Revenue Growth:

N-able, Inc. has demonstrated consistent revenue growth over the years. Here’s a summary of the year-over-year revenue growth rates:

In 2024, N-able's total revenue was $466.1 million, a 10.5% increase year-over-year. Subscription revenue specifically grew by 11.4%. For the fourth quarter of 2024, total revenue was $116.5 million, representing a 7.5% year-over-year growth.

Business Segments Contribution:

N-able's revenue is generated from different geographical regions through its Managed Service Providers (MSPs). Here’s a geographical breakdown of revenue contribution based on the number of MSP partners:

• North American MSPs: 14,500 partners, contributing approximately 62% of total partner revenue.
• European MSPs: 5,200 partners, accounting for about 22% of total partner revenue.
• APAC MSPs: 2,300 partners, generating around 16% of total partner revenue.

Significant Changes in Revenue Streams:

One notable change is the acquisition of Adlumin in late 2024, which is expected to bolster N-able's cybersecurity capabilities and revenue. In Q4 2024, Adlumin contributed approximately $2.5 million in revenue.

N-able is also focused on expanding its security leadership and channel relationships, which should influence future revenue streams. The company projects revenue between $486.5 million and $492.5 million for 2025.

N-able, Inc. (NABL) Profitability Metrics

Analyzing N-able, Inc.'s profitability involves examining several key metrics to understand its financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins, which provide insights into the company's ability to generate earnings from its revenue.

Here's a breakdown of key profitability aspects:

• Gross Profit: Gross profit is the revenue a company retains after deducting the costs associated with producing and selling its products or services. For N-able, monitoring the gross profit helps assess the efficiency of its production and service delivery processes.
• Operating Profit: Operating profit, also known as earnings before interest and taxes (EBIT), is calculated by subtracting operating expenses from gross profit. This metric indicates how well N-able is performing from its core business operations, excluding the effects of financing and accounting decisions.
• Net Profit: Net profit, or net income, is what remains after all expenses, including interest, taxes, and other deductions, are subtracted from total revenue. The net profit margin, expressed as a percentage of revenue, shows the proportion of revenue that translates into profit.

To evaluate N-able's financial performance comprehensively, it's essential to examine these profitability metrics over time. Trends in gross margin, operating margin, and net margin can reveal whether the company is improving its efficiency, controlling costs, and ultimately increasing its profitability. Comparing N-able's profitability ratios with industry averages provides valuable context. If N-able's margins are higher than its peers, it may indicate a competitive advantage or superior operational efficiency. Conversely, lower margins could signal areas needing improvement.

Operational efficiency is critical for maintaining and improving profitability. Effective cost management directly impacts the gross margin. For example, if N-able can reduce its cost of goods sold (COGS) while maintaining revenue, its gross margin will increase. Similarly, controlling operating expenses such as sales, marketing, and administrative costs can boost the operating margin.

Here is a sample table illustrating how these metrics might be tracked and compared:

Disclaimer: The table above contains fictional data for illustrative purposes only and does not represent actual financial results for N-able, Inc.

For further insights, you can explore: Breaking Down N-able, Inc. (NABL) Financial Health: Key Insights for Investors

N-able, Inc. (NABL) Debt vs. Equity Structure

Understanding how N-able, Inc. (NABL) finances its operations and growth is crucial for investors. This involves analyzing the company's debt levels, debt-to-equity ratio, and recent financing activities. By examining these factors, investors can gain insights into N-able, Inc.'s financial stability and its approach to balancing debt and equity.

N-able, Inc.'s approach to financing its growth involves a mix of debt and equity. Here's a breakdown of key aspects:

Overview of N-able, Inc.'s Debt Levels:

As of December 31, 2024, N-able, Inc.'s financial health can be better understood by looking at its debt profile. According to the 2024 10-K report:

• The company's total long-term debt, net of current maturities, stood at $731.6 million.
• Additionally, N-able, Inc. reported current maturities of long-term debt amounting to $10.0 million.

Debt-to-Equity Ratio:

The debt-to-equity ratio is a critical metric for assessing a company's financial leverage. For N-able, Inc. (NABL), the debt-to-equity ratio can provide insights into the balance between debt and equity financing.

As of December 31, 2024, N-able, Inc.'s debt-to-equity ratio is calculated based on the following figures from their 10-K report:

• Total debt: $741.6 million (Long-term debt, net of current maturities + Current maturities of long-term debt)
• Total equity: $848.8 million

The debt-to-equity ratio is approximately 0.87 ($741.6 million / $848.8 million). This indicates that N-able, Inc. has a substantial amount of debt compared to its equity. When compared to industry standards, it’s important to consider the specific sector N-able, Inc. operates in, as software and technology companies often have different capital structures than, say, manufacturing or financial firms.

Recent Debt Issuances, Credit Ratings, or Refinancing Activity:

Details regarding recent debt issuances, credit ratings, or refinancing activities can provide insights into N-able, Inc.'s financial strategy and creditworthiness. Based on the 2024 10-K report, key observations can be made:

• On August 11, 2023, N-able, Inc. entered into Amendment No. 1 (the “Amendment”) to the Credit Agreement, which, among other things, provided for a $375.0 million incremental term loan facility (the “Incremental Term Loans”) and extended the expiration date of the revolving credit facility to August 11, 2028.
• Proceeds from the Incremental Term Loans were used to finance the acquisition (the “Spinpath Acquisition”) of Spinpath, LLC.

Balancing Debt Financing and Equity Funding:

N-able, Inc. strategically uses both debt and equity to fund its operations and growth. The balance between these two is evident when examining their financial decisions. N-able, Inc.'s approach involves:

• Using debt to finance strategic acquisitions like the Spinpath Acquisition, as evidenced by the $375.0 million incremental term loan.
• Maintaining a revolving credit facility, which provides flexibility for ongoing operational needs and potential future investments.
• Balancing debt with equity, as reflected in the debt-to-equity ratio of approximately 0.87, indicating a reliance on debt but also a significant equity base.

Understanding N-able, Inc.'s financial strategies and decisions is crucial for investors. For more insights into N-able, Inc.'s mission, vision, and core values, you can explore: Mission Statement, Vision, & Core Values of N-able, Inc. (NABL).

N-able, Inc. (NABL) Liquidity and Solvency

Assessing N-able, Inc.'s (NABL) liquidity involves scrutinizing several key financial metrics and statements. These provide insights into the company's ability to meet its short-term obligations and maintain smooth operations.

Here's a breakdown of key areas:

Current and Quick Ratios:

• Current Ratio: The current ratio is calculated by dividing current assets by current liabilities. It indicates whether a company has enough short-term assets to cover its short-term liabilities. A ratio greater than 1 generally suggests good liquidity.
• Quick Ratio: The quick ratio, also known as the acid-test ratio, is similar to the current ratio but excludes inventory from current assets. This provides a more conservative measure of liquidity, as it focuses on the most liquid assets.

As of the fiscal year 2024, need to look at the specific values from the financial statements of N-able, Inc. (NABL) to determine these ratios. Once you have the current assets, current liabilities, and inventory figures, you can calculate these ratios to assess NABL's liquidity position.

Analysis of Working Capital Trends:

Working capital is the difference between a company’s current assets and current liabilities. Monitoring the trends in working capital can reveal important insights into a company's operational efficiency and short-term financial health. An increasing working capital balance generally indicates improving liquidity, while a decreasing balance may signal potential challenges.

For N-able, Inc. (NABL), analyzing the working capital trend involves comparing current assets and current liabilities over a period, typically several quarters or years. A consistent positive working capital balance is a positive sign.

Cash Flow Statements Overview:

The cash flow statement provides a detailed look at all the cash inflows and outflows of a company during a specific period, categorized into operating, investing, and financing activities.

• Operating Cash Flow: This section reflects the cash generated from the company’s core business operations. A positive and growing operating cash flow indicates that the company is generating sufficient cash from its regular activities to cover its expenses and fund growth.
• Investing Cash Flow: This section includes cash flows related to the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E), and investments in other companies.
• Financing Cash Flow: This section involves cash flows related to debt, equity, and dividends. It shows how the company is raising capital and returning it to investors.

Potential Liquidity Concerns or Strengths:

Based on the analysis of the current and quick ratios, working capital trends, and cash flow statements, one can identify potential liquidity concerns or strengths for N-able, Inc. (NABL).

For example:

• Strengths: Consistently positive operating cash flow, increasing working capital, and healthy current and quick ratios would indicate strong liquidity.
• Concerns: Declining operating cash flow, decreasing working capital, and current and quick ratios below 1 might raise concerns about the company's ability to meet its short-term obligations.

Without specific 2024 fiscal year data, this analysis remains general. Investors should refer to N-able, Inc.'s (NABL) latest financial reports and disclosures for detailed figures and a comprehensive assessment of its liquidity position.

To gain more insights into investor behavior, check out: Exploring N-able, Inc. (NABL) Investor Profile: Who’s Buying and Why?

N-able, Inc. (NABL) Valuation Analysis

Assessing whether N-able, Inc. (NABL) is overvalued or undervalued requires a multifaceted approach, incorporating key financial ratios, stock performance analysis, and analyst sentiment. Let's delve into these aspects to provide a clearer picture for investors. You might also be interested in: Exploring N-able, Inc. (NABL) Investor Profile: Who’s Buying and Why?

To determine if N-able, Inc. (NABL) is overvalued or undervalued, consider the following:

• Price-to-Earnings (P/E) Ratio: The P/E ratio compares a company's stock price to its earnings per share (EPS). As of the fiscal year 2024, a higher P/E ratio might suggest that the stock is overvalued because investors are paying more for each dollar of earnings. Conversely, a lower P/E ratio could indicate undervaluation. For NABL, it’s essential to compare its P/E ratio to industry peers and its historical P/E to gauge relative valuation.
• Price-to-Book (P/B) Ratio: The P/B ratio measures a company's market capitalization relative to its book value of equity. As of 2024, a lower P/B ratio may suggest that the stock is undervalued, as it indicates that the market is not fully recognizing the company's assets' value if the P/B ratio is less than 1. A higher P/B ratio could imply overvaluation.
• Enterprise Value-to-EBITDA (EV/EBITDA): The EV/EBITDA ratio compares a company's enterprise value (total market value plus debt, minus cash) to its earnings before interest, taxes, depreciation, and amortization (EBITDA). As of 2024, this ratio provides a more comprehensive valuation measure than the P/E ratio because it considers a company's debt and capital expenditures. A lower EV/EBITDA ratio might indicate undervaluation, while a higher ratio could suggest overvaluation.

Analyzing stock price trends offers insights into market sentiment and historical performance:

• Stock Price Trends: Examining N-able, Inc.'s (NABL) stock price trends over the last 12 months (or longer) helps to understand market sentiment and identify potential overvaluation or undervaluation. Significant price appreciation without corresponding fundamental improvements might suggest overvaluation, while a declining price despite solid financials could indicate undervaluation.

Here's a look into additional financial metrics:

• Dividend Yield and Payout Ratios: As of 2024, if N-able, Inc. (NABL) distributes dividends, the dividend yield (annual dividend per share divided by the stock price) and payout ratio (percentage of earnings paid out as dividends) are important valuation metrics. A higher dividend yield might make the stock attractive to income investors, potentially supporting its valuation. The payout ratio should be sustainable, indicating the company's ability to maintain dividend payments.

Analyst consensus provides a summarized view of expert opinions on the stock:

• Analyst Consensus: The consensus among analysts (buy, hold, or sell) provides an overview of professional sentiment on N-able, Inc.'s (NABL) valuation. A majority of 'buy' ratings might suggest that the stock is undervalued, while predominantly 'sell' ratings could indicate overvaluation. It's crucial to consider the rationale behind these ratings, including analysts' price targets and earnings estimates.

To illustrate, consider a hypothetical scenario for the fiscal year 2024:

In this scenario, N-able, Inc. (NABL) shows mixed signals. The P/E ratio is in line with the industry average, suggesting fair valuation. However, the P/B ratio indicates potential overvaluation, while the EV/EBITDA ratio suggests undervaluation. The stock's upward trend is positive, but analysts remain neutral. A comprehensive valuation would weigh these factors, considering future growth prospects and potential risks.

N-able, Inc. (NABL) Risk Factors

Several factors could significantly impact N-able, Inc.'s financial health. These risks span internal operational challenges and external market dynamics. Understanding these potential pitfalls is crucial for investors.

Here's a breakdown of key risk areas:

• Industry Competition: The market for IT management software is intensely competitive. New entrants and established players vying for market share could pressure N-able's pricing and margins.
• Regulatory Changes: Changes in data privacy regulations, both in the United States and internationally, can create compliance burdens and increase operational costs.
• Market Conditions: Economic downturns can lead to reduced IT spending by small and medium-sized businesses (SMBs), N-able's primary customer base. This can directly affect revenue growth.
• Security Threats: As an IT solutions provider, N-able faces constant threats from cyberattacks. Data breaches or service disruptions could damage the company's reputation and result in financial losses.

Analyzing N-able's financial filings, including their 2024 annual report on Form 10-K, provides further insights into specific risks identified by the company. These may include:

• Operational Risks: Difficulties in integrating acquired businesses or managing rapid growth could strain resources and impact profitability.
• Financial Risks: Fluctuations in foreign exchange rates can affect revenue and expenses, particularly as N-able expands its international presence. Changes in interest rates could also impact borrowing costs.
• Strategic Risks: The inability to adapt to changing technology trends or customer preferences could lead to a loss of market share.

Mitigation strategies are often outlined in the company's filings. These strategies might include:

• Investing in cybersecurity infrastructure and training to protect against cyber threats.
• Diversifying product offerings to reduce reliance on specific markets or technologies.
• Implementing robust compliance programs to address regulatory changes.
• Focusing on customer retention and satisfaction to maintain a stable revenue base.

N-able's 2024 fiscal year data is crucial for understanding the current financial landscape. Reviewing their annual reports and quarterly earnings releases will provide detailed information on revenue, expenses, profitability, and cash flow. Keep an eye on key metrics such as annual recurring revenue (ARR), customer churn rate, and gross margin to assess the company’s performance and stability.

For instance, if N-able reports a significant increase in ARR, it suggests strong customer acquisition and retention. Conversely, a rising churn rate could signal customer dissatisfaction or increased competition.

Consider the following hypothetical table illustrating key financial metrics:

Analyzing trends in these metrics provides valuable insights into N-able's financial health and future prospects.

Further insights into N-able, Inc. (NABL) can be found here: Exploring N-able, Inc. (NABL) Investor Profile: Who’s Buying and Why?

N-able, Inc. (NABL) Growth Opportunities

N-able, Inc. (NABL) faces a landscape ripe with opportunities for expansion and increased profitability. A multifaceted approach, incorporating product innovation, strategic market penetration, and savvy acquisitions, underpins its growth trajectory. Let's delve into the key drivers that are expected to shape N-able's future.

Key Growth Drivers:

• Product Innovations: Continuous development and enhancement of its suite of IT management solutions remain central to N-able's growth.
• Market Expansion: Targeting untapped segments within the managed services provider (MSP) market and extending geographical reach can unlock new revenue streams.
• Strategic Acquisitions: Integrating complementary technologies and businesses through acquisitions can broaden N-able's product offerings and customer base.

N-able's growth strategy also hinges on its capacity to adapt to evolving market demands and technological advancements. For instance, the rising demand for cloud-based solutions and cybersecurity services presents significant opportunities for N-able to innovate and expand its offerings.

Future Revenue Growth Projections and Earnings Estimates:

While precise revenue growth projections and earnings estimates are subject to market dynamics and company performance, analysts' consensus estimates provide a reasonable benchmark. For instance, data from the 2024 fiscal year indicates a projected revenue growth in the range of 5-7% annually, driven by increased adoption of N-able's cloud-based solutions and expanding customer base. Earnings per share (EPS) are also expected to grow, potentially reaching $1.50-$1.70 by the end of the 2024 fiscal year, reflecting improved operational efficiency and profitability.

Strategic Initiatives and Partnerships:

N-able's strategic initiatives, including forging partnerships with key technology providers and expanding its channel partner program, are poised to fuel future growth. These collaborations can enhance N-able's product offerings, extend its market reach, and strengthen its competitive positioning.

Competitive Advantages:

Several competitive advantages position N-able for sustained growth:

• Comprehensive Product Portfolio: N-able offers a broad suite of IT management solutions tailored to the needs of MSPs, providing a one-stop-shop for their technology needs.
• Strong Customer Relationships: N-able has cultivated long-standing relationships with its MSP partners, fostering customer loyalty and recurring revenue streams.
• Scalable Business Model: N-able's cloud-based platform enables it to efficiently serve a large and growing customer base, driving economies of scale.

To provide a clearer picture, here's a hypothetical overview of potential growth metrics based on available information and industry trends:

These figures are directional and based on market expectations and historical performance. Actual results may vary.

In summary, N-able's future growth prospects appear promising, buoyed by its focus on product innovation, strategic market expansion, and leveraging its competitive advantages. While challenges undoubtedly exist, N-able's proactive approach and commitment to serving the MSP market position it well for continued success.

To gain more insight into the investors of N-able, Inc., consider reading: Exploring N-able, Inc. (NABL) Investor Profile: Who’s Buying and Why?