N-able's Q4 2024 Earnings Call: Discrepancies in Adlumin's Impact, Long-Term Contracts, and Revenue Recognition

These are the key contradictions discussed in N-able's latest 2024Q4 earnings call, specifically including: Adlumin's Revenue Contribution and ARR Expectations, Impact of Long-Term Contract Initiatives on Growth, and Revenue Recognition and Long-Term Contract Initiative:



Revenue and Earnings Performance:
- N-able's Fourth Quarter 2024 revenue grew 7% year-over-year in constant currency, with full-year 2024 revenue growing 10% at constant currency.
- The company reported adjusted EBITDA in the fourth quarter of $38.1 million, reflecting a 32.7% margin.
- The growth was driven by strong demand for its comprehensive software solutions across security, data protection, and unified endpoint management.

Adlumin Acquisition Impact:
- The acquisition of Adlumin added $21 million in ARR, with significant cross-sell potential for Adlumin's XDR and MDR solutions.
- The integration is expected to accelerate revenue growth by expanding the company's security offerings to the mid-market and reseller channels.
- This acquisition is part of N-able's strategy to strengthen its product suite and expand its reach in the market.

Customer Engagement and Retention:
- N-able transitioned over 50% of its revenue from annual contracts to over 100%-committed contracts, enhancing customer relationships and retention.
- Dollar-based net revenue retention was approximately 103% on both a reported and constant currency basis.
- The focus on engagement models and customer success initiatives contributed to improved customer retention and growth.

Channel Expansion:
- By leveraging Adlumin's established relationships, N-able aims to expand its presence in the North American reseller channel and internationally in markets like the U.K., DACH, and Australia.
- This expansion is expected to deliver significant growth in the reseller portion of the business, outpacing the growth of the MSP business in the coming years.
- The strategy is to tap into the substantial IT spending flowing through resellers, broadening N-able's serviceable addressable market.