N-able’s Q1 2025 Earnings Call: A Critical Crossroads for Cybersecurity Growth

N-able, Inc. (NYSE: NABL), a leader in unified IT and cybersecurity management solutions, is set to host its first-quarter 2025 earnings conference call on May 8, 2025, at 8:30 a.m. ET. The event will be a pivotal moment for investors to gauge whether the company can navigate its growth challenges and deliver on ambitious strategic initiatives. With the stock trading at $8.50—a 30% discount to its 2024 highs—the call will likely determine whether N-able can regain investor confidence or face further skepticism.

Financial Outlook: Modest Growth Amid Elevated Expectations

N-able’s Q1 2025 revenue guidance of $115–116 million represents a mere 1–2% year-over-year (YoY) growth, or 3–4% in constant currency, underscoring a slowdown compared to its 10% constant-currency revenue growth in 2024. Analysts had anticipated $120.4 million, making this guidance a significant disappointment. The full-year 2025 forecast of $486.5–492.5 million also falls short of the $512.2 million consensus, raising questions about execution risks tied to its annual contract initiative and integration of the Adlumin acquisition.

Historically, N-able has had a mixed track record in meeting earnings expectations. For instance, it missed its Q1 2024 EPS estimate by $0.02 but beat revenue expectations. However, the Q1 2025 guidance shortfall has already triggered a 20% drop in its stock price since the announcement, reflecting investor frustration with the company’s muted outlook.

Strategic Initiatives: Betting on Cyber Resiliency

Despite the tepid financials, N-able’s long-term strategy remains compelling. The acquisition of Adlumin in late 2024—bolstering its extended detection and response (XDR) capabilities—has added $2.5 million in revenue in Q4 2024 alone. The company is also advancing its AI-powered solutions, such as immutable backups and enhanced restore processes, which aim to differentiate it in the fast-growing cybersecurity market.

N-able’s Annual Recurring Revenue (ARR) growth target of 7–9% for 2025 and a 27–28% adjusted EBITDA margin are critical to proving scalability. Management has emphasized that operational efficiencies and the Adlumin integration will help recover margins to over 30% by 2026, aligning with its “partner-first” strategy to expand market reach.

Analyst Sentiment: Caution Amid Strategic Potential

Analysts are split between acknowledging N-able’s long-term potential and expressing concern over near-term execution. BMO Capital Markets, which downgraded its price target from $13.50 to $8.50, cited “weaker revenue and EBITDA margin guidance” as key risks. The firm highlighted challenges in N-able’s annual contract initiative, which may be slowing organic growth, and noted that the Adlumin acquisition’s benefits remain unproven.

On the positive side, Needham & Company and JPMorgan remain optimistic about the Adlumin integration’s impact on N-able’s cybersecurity portfolio. With a strong gross profit margin of 84% and a $1.2 billion market cap, N-able retains financial flexibility to invest in growth, including its $75 million share repurchase program announced in March .

Data-Driven Risks and Opportunities

• Valuation Concerns: N-able’s P/E ratio of 56.2 reflects high expectations, making it vulnerable to disappointment.
• Debt Management: The company’s $355 million in long-term debt must be monitored against its $215 million in cash equivalents.
• Market Share: N-able’s 95.66% institutional ownership signals entrenched investor interest, but activist shareholders may demand faster results.

Conclusion: The Stakes for May 8

The May 8 earnings call will be a make-or-break moment for N-able. Investors will scrutinize whether the company can:
1. Exceed its conservative Q1 revenue guidance, providing hope for a rebound in 2025.
2. Demonstrate progress on Adlumin integration, showcasing how it improves security offerings and customer retention.
3. Reconcile its 7–9% ARR growth target with current execution challenges, particularly in its annual contract initiative.

With a $75 million buyback signaling confidence and a $1.2 billion market cap offering room for upside, N-able’s stock could stabilize if the call addresses these concerns. However, if management fails to clarify growth bottlenecks or provide clarity on margin recovery, the stock may face further declines.

In a sector projected to grow 10% annually through 2027, N-able’s success hinges on proving it can balance strategic ambition with operational discipline. The May 8 call will be the first test of whether its leadership can deliver.