N-able's Q1 2025 Earnings Call: Dissecting Contradictions on Adlumin's Impact, Growth Drivers, and Revenue Recognition

Adlumin revenue contribution and impact on ARR growth, growth drivers for 2025, ASC 606 impact on revenue recognition, and sales cycle and demand trends are the key contradictions discussed in N-able's latest 2025Q1 earnings call.



Revenue and Earnings Performance:
- N-able reported revenue of $118.2 million for Q1 2025, exceeding the high-end of guidance by $2.2 million, reflecting 4% year-over-year growth on a reported basis and 6% on a constant currency basis.
- The company's adjusted EBITDA was $31.6 million, achieving a margin of 27%, and unlevered free cash flow was $28.1 million.
- The strong performance was driven by successful execution of the company's growth strategy and demand for its cyber-resiliency platform.

Security Initiatives and Product Launches:
- N-able's security initiatives included the release of breach prevention for Microsoft 365 and the integration of Vulnerability Management into its Unified Endpoint Management solution.
- These launches addressed critical customer pain points and enhanced the company's market position by providing a comprehensive security solution.
- The company's efforts to advance its product roadmap and address emerging threats positioned it to meet strong demand from its customer base.

Channel Expansion and Partner Growth:
- N-able expanded its go-to-market strategy, adding resellers across the globe and revamping its partner portal to enhance transactions.
- This expansion, focusing on resellers and system integrators, aims to deliver cyber resilience to a broader range of businesses.
- The efforts are already showing traction, with new partnerships contributing to increased bookings, including a significant 6-figure ARR deal.

Adlumin Acquisition and Impact:
- The acquisition of Adlumin Security Operations has contributed to N-able's growth, with its automated SOC now the fastest-growing SKU across the customer base.
- The acquisition has also supported cross-selling opportunities, which are expected to drive ARR acceleration and enhance customer stickiness.
- The integration of Adlumin's capabilities has strengthened N-able's position in the market, particularly in the mid- and low-end of the MSP market.