First Quarter Subscription Revenue Increased
10% Year-Over-Year, 13% in Constant Currency
TTM Dollar-Based Net Retention Rate of 108%
Full-Year 2022 Revenue Outlook of 9%
Year-Over-Year Growth, or 13% to 14% on a Constant Currency
Basis
N-able, Inc. (NYSE:NABL), the solutions partner helping IT
services providers deliver security, backup, and remote monitoring
and management services, today reported results for its first
quarter ended March 31, 2022.
“Our first quarter of 2022 came in above the high-end of our
expectations, which is a testament not only to the hard work of our
N-able team, but to expanding awareness of our brand and our
growing reputation as the partner of choice for MSPs around the
world,” said N-able President and CEO John Pagliuca. “Our
call-to-action in 2022 is ‘Earn More Fans,’ and to us that implies
that we must execute well on every aspect of N-able’s value
proposition. Our technology is being recognized as some of the
top-rated offerings on the market as we continue to help our
partners grow their businesses, and we are tuning our culture to
ensure we are continuously improving to serve our mission.”
“We delivered strong revenue growth for the first quarter driven
by robust demand for our security and data protection solutions,”
added N-able Executive Vice President & CFO Tim O’Brien. “The
industry tailwinds of increased IT complexity, labor scarcity, and
rising cyber threats continue to compel MSPs to seek better
solutions and providers who can help them grow. Our increased
investments in brand, product, and go-to-market activities are
focused on helping MSPs capitalize on these trends, and we are on
track to drive revenue acceleration and margin improvement into the
back half of 2022 on a constant currency basis.”
First quarter 2022 financial highlights:
- Total revenue of $90.9 million, representing approximately 9%
year-over-year growth, or approximately 12% year-over-year growth
on a constant currency basis.
- Subscription revenue of $88.6 million, representing
approximately 10% year-over-year growth, or approximately 13%
year-over-year growth on a constant currency basis.
- GAAP gross margin of 84.3% and non-GAAP gross margin of
85.7%.
- GAAP net income of $5.1 million, or $0.03 per diluted share,
and non-GAAP net income of $15.6 million, or $0.09 per diluted
share.
- Adjusted EBITDA of $27.0 million, representing an adjusted
EBITDA margin of 29.7%.
For a reconciliation of our GAAP to non-GAAP results, please see
the tables below.
Additional highlights for the first quarter of 2022 include:
- N-able was awarded the Backup and Disaster Recovery Award from
TMC’s Cloud Computing Magazine, which recognizes excellence in the
advancement of cloud computing technologies, acknowledging N-able’s
cloud-first data protection as a service and quick and reliable
recovery from events such as ransomware attacks.
- N-able announced that, since launching its backup solution for
Microsoft 365™ domains in December 2019, more than 4,000 N-able
partners are using N-able’s solution to help prevent data loss
across more than 25,000 customer domains and over 900,000 Exchange™
mailboxes, a number that continues to grow rapidly.
- N-able announced the rapid and accelerating adoption of its EDR
offering from SentinelOne® (NYSE: S) across N-able’s global partner
base to replace legacy AV - now protecting more than one million
customer endpoints.
- N-able launched N-able DNS Filtering, a cloud-based, AI-driven
content filtering and threat protection service designed to enable
MSPs to better monitor, manage, and proactively protect and secure
their customers’ network regardless of location or connection, as a
new security offering to its N-central® MSP partners.
- N-able announced that CRN, a brand of The Channel Company,
named six of N-able's global partner leaders to the 2022 Channel
Chiefs list, a list of top IT channel vendor representatives who
continually demonstrate expertise, influence, and innovation in
channel leadership.
- N-able announced that CRN also awarded the Company with a
prestigious 5-star rating in its 2022 Partner Program Guide, which
is a key resource for the channel industry to find the vendor best
fit for their needs.
Balance Sheet
At March 31, 2022, total cash and cash equivalents were $70.4
million and total debt was $338.4 million.
The financial results included in this press release are
preliminary and pending final review by the company and its
external auditors. Financial results will not be final until N-able
files its quarterly report on Form 10-Q for the period. Information
about N-able's use of non-GAAP financial measures is provided below
under “Non-GAAP Financial Measures.” In addition, through July 19,
2021, the date of completion of N-able’s separation from SolarWinds
Corporation (“SolarWinds”), N-able operated as part of SolarWinds
and the financial results for the periods through such date have
been prepared from SolarWinds’ historical accounting records and
presented on a stand-alone basis as if N-able’s business’
operations had been conducted independently from SolarWinds. While
the allocations and estimates in these carve-out financials are
based on assumptions that N-able’s management believes are
reasonable, the financial results presented may not be indicative
of the financial position, results of operations and cash flows of
N-able in the future or if N-able had been a separate, stand-alone
publicly traded entity during the periods presented. N-able’s
financial results for the period from July 20, 2021 through March
31, 2022, are based on our reported results as a stand-alone
company.
Financial Outlook
As of May 12, 2022, N-able is providing its financial outlook
for the second quarter of 2022 and full year 2022. The financial
information below represents forward-looking non-GAAP financial
information, including adjusted EBITDA. These non-GAAP financial
measures exclude, among other items mentioned below, amortization
of acquired intangible assets and developed technology,
depreciation expense, income tax expense (benefit), interest
expense, net, unrealized foreign currency (gains) losses,
acquisition related costs, spin-off costs, stock-based compensation
expense and related employer-paid payroll taxes and restructuring
and other costs. We have not reconciled our estimates of these
non-GAAP financial measures to their most directly comparable GAAP
measure as a result of uncertainty regarding, and the potential
variability of, these excluded items in future periods.
Accordingly, reconciliation is not available without unreasonable
effort, although it is important to note that these excluded items
could be material to our results computed in accordance with GAAP
in future periods. Our reported results provide reconciliations of
non-GAAP financial measures to their nearest GAAP equivalents.
The financial outlook provided below includes updated
expectations of increased FX headwinds.
Financial Outlook for the Second Quarter of 2022
N-able management currently expects to achieve the following
results for the second quarter of 2022:
- Total revenue in the range of $91.0 to $91.5 million,
representing approximately 7% year-over-year growth, or
approximately 13% growth on a constant currency basis.
- Adjusted EBITDA in the range of $26.0 to $26.5 million,
representing approximately 29% of total revenue.
Financial Outlook for Full-Year 2022
N-able management currently expects to achieve the following
results for the full year 2022:
- Total revenue in the range of $376 to $379 million,
representing 9% year-over-year growth, or 13% to 14% year-over-year
growth on a constant currency basis.
- Adjusted EBITDA in the range of $112.5 to $115.5 million,
representing approximately 30% of total revenue.
Additional details on the company's outlook will be provided on
the conference call.
Conference Call and Webcast
In conjunction with this announcement, N-able will host a
conference call today to discuss its financial results, business
and business outlook at 8:30 a.m. ET on May 12, 2022. A live
webcast of the call will be available on the N-able Investor
Relations website at http://investors.n-able.com. A live dial-in
will be available domestically at (844) 200-6205 and
internationally at +1 (929) 526-1599. To access the live call,
please dial in 5-10 minutes before the scheduled start time and
enter the conference passcode 274357 to gain access to the
conference call. A replay of the webcast will be available on a
temporary basis shortly after the event on the N-able Investor
Relations website.
Forward-Looking Statements
This press release contains “forward-looking” statements, which
are subject to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995, including statements regarding our
financial outlook for the second quarter and full year 2022. These
forward-looking statements are based on management's beliefs and
assumptions and on information currently available to management.
Forward-looking statements include all statements that are not
historical facts and may be signified by terms such as “aim,”
“anticipate,” “believe,” “continue,” “expect,” “feel,” “intend,”
“estimate,” “seek,” “plan,” “may,” “can,” “could,” “should,”
“will,” “would” or similar expressions and the negatives of those
terms. Forward-looking statements involve known and unknown risks,
uncertainties and other factors that may cause our actual results,
performance or achievements to be materially and adversely
different from any future results, performance or achievements
expressed or implied by the forward-looking statements. Factors
that could cause or contribute to such differences include, but are
not limited to, the following: (a) risks related to our spin-off
from SolarWinds into a newly created and separately traded public
company, including that the spin-off could disrupt or adversely
affect our business, results of operations and financial condition,
that the spin-off may not achieve some or all of any anticipated
benefits with respect to our business, that the distribution,
together with certain related transactions, may not qualify as a
transaction that is generally tax-free for U.S. federal income tax
purposes, which could result in N-able incurring significant tax
liabilities, and, in certain circumstances, requiring us to
indemnify SolarWinds for material taxes and other related amounts
pursuant to indemnification obligations under the tax matters
agreement; (b) the possibility that the global COVID-19 pandemic
may continue to adversely affect our business, results of
operations and financial condition or the impact of the COVID-19
pandemic on the global economy or on the business operations and
financial conditions of our customers, their end-customers and our
prospective customers; (c) our ability to sell subscriptions to new
MSP partners, to sell additional solutions to our existing MSP
partners and to increase the usage of our solutions by our existing
MSP partners, as well as our ability to generate and maintain MSP
partner loyalty; (d) any decline in our renewal or net retention
rates; (e) the possibility that general economic conditions or
uncertainty may cause information technology spending to be reduced
or purchasing decisions to be delayed, including as a result of the
COVID-19 pandemic, inflation, war and political unrest, military
conflict (including between Russia and Ukraine), terrorism,
sanctions or other geopolitical events globally, or that such
factors may otherwise harm our financial condition or results of
operations; (f) any inability to generate significant volumes of
high quality sales leads from our digital marketing initiatives and
convert such leads into new business at acceptable conversion
rates; (g) any inability to successfully identify, complete and
integrate acquisitions and manage our growth effectively; (h) risks
associated with our international operations; (i) risks that
cyberattacks, including the cyberattack on SolarWinds’ Orion
Software Platform and internal systems announced by SolarWinds in
December 2020, or the Cyber Incident, and other security incidents
may result, in compromises or breaches of our, our MSP partners’,
or their SME customers’ systems, the insertion of malicious code,
malware, ransomware or other vulnerabilities into our, our MSP
partners’, or their SME customers’ environments, the exploitation
of vulnerabilities in our, our MSP partners’, or their SME
customers’ security, the theft or misappropriation of our, our MSP
partners’, or their SME customers’ proprietary and confidential
information, and interference with our, our MSP partners’, or their
SME customers’ operations, exposure to legal and other liabilities,
higher MSP partner and employee attrition and the loss of key
personnel, negative impacts to our sales, renewals and upgrades and
reputational harm and other serious negative consequences, any or
all of which could materially harm our business; (j) our status as
a controlled company; (k) our ability to attract and retain
qualified employees and key personnel as a standalone public
company; (l) the timing and success of new product introductions
and product upgrades by N-able or its competitors; (m) our ability
to protect and defend our intellectual property and not infringe
upon others’ intellectual property; (n) the possibility that our
operating income could fluctuate and may decline as percentage of
revenue as we make further expenditures to expand our operations in
order to support additional growth in our business; (o) potential
foreign exchange gains and losses related to expenses and sales
denominated in currencies other than the functional currency of an
associated entity, (p) our indebtedness, including potential
restrictions on our operations and the impact of events of default;
(q) our ability to operate our business internationally and
increase sales of our solutions to our MSP partners located outside
of the United States; and (r) such other risks and uncertainties
described more fully in documents filed with or furnished to the
Securities and Exchange Commission, including the risk factors
discussed in the final Information Statement included in N-able’s
Annual Report on Form 10-K for the year ended December 31, 2021
that N-able filed with the SEC on March 8, 2022; and those that
will be discussed in the Quarterly Report on Form 10-Q for the
period ended March 31, 2022, that N-able anticipates filing on or
before May 12, 2022. All information provided in this release is as
of the date hereof and N-able undertakes no duty to update this
information except as required by law.
Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with
GAAP, we use certain non-GAAP financial measures to clarify and
enhance our understanding, and aid in the period-to-period
comparison, of our performance. We believe that these non-GAAP
financial measures provide supplemental information that is
meaningful when assessing our operating performance because they
exclude the impact of certain amounts that our management and board
of directors do not consider part of core operating results when
assessing our operational performance, allocating resources,
preparing annual budgets and determining compensation. Accordingly,
these non-GAAP financial measures may provide insight to investors
into the motivation and decision-making of management in operating
the business.
N-able also believes that these non-GAAP financial measures are
used by investors and security analysts to (a) compare and evaluate
its performance from period to period and (b) compare its
performance to those of its competitors. These non-GAAP measures
exclude certain items that can vary substantially from company to
company depending upon their financing and accounting methods, the
book value of their assets, their capital structures and the method
by which their assets were acquired.
As a result, these non-GAAP financial measures have limitations
and should not be considered in isolation from, or as a substitute
for, their most comparable GAAP measures. These non-GAAP financial
measures are not prepared in accordance with GAAP, do not reflect a
comprehensive system of accounting and may not be completely
comparable to similarly titled measures of other companies due to
potential differences in the exact method of calculation between
companies. Certain items that are excluded from these non-GAAP
financial measures can have a material impact on operating and net
income (loss).
N-able's management and board of directors compensate for these
limitations by using these non-GAAP financial measures as
supplements to GAAP financial measures and by reviewing the
reconciliations of the non-GAAP financial measures to their most
comparable GAAP financial measure. Set forth in the tables below
are the corresponding GAAP financial measures for each non-GAAP
financial measure presented. Investors are encouraged to review the
reconciliations of these non-GAAP financial measures to their most
comparable GAAP financial measures that are set forth in the tables
below.
Non-GAAP Gross Margin, Non-GAAP Operating Income and Non-GAAP
Operating Margin. We provide non-GAAP total cost of revenue,
non-GAAP gross margin, non-GAAP operating expense and non-GAAP
operating income and related non-GAAP gross and operating margins
excluding such items as stock-based compensation expense and
related employer-paid payroll taxes, amortization of acquired
intangible assets, acquisition related costs, spin-off costs and
restructuring costs and other. Management believes these measures
are useful for the following reasons:
- Stock-Based Compensation Expense and Related Employer-Paid
Payroll Taxes. We provide non-GAAP information that excludes
expenses related to stock-based compensation and related
employer-paid payroll taxes associated with our employees’
participation in N-able's stock-based incentive compensation plans.
We believe that the exclusion of stock-based compensation expense
provides for a better comparison of our operating results to prior
periods and to our peer companies as the calculations of
stock-based compensation vary from period to period and company to
company due to different valuation methodologies, subjective
assumptions and the variety of award types. Employer-paid payroll
taxes on stock-based compensation is dependent on our stock price
and the timing of the taxable events related to the equity awards,
over which our management has little control, and does not
necessarily correlate to the core operation of our business.
Because of these unique characteristics of stock-based compensation
and related employer-paid payroll taxes, management excludes these
expenses when analyzing the organization’s business
performance.
- Amortization of Acquired Intangible Assets. We provide non-GAAP
information that excludes expenses related to purchased intangible
assets associated with our acquisitions. We believe that
eliminating this expense from our non-GAAP measures is useful to
investors because the amortization of acquired intangible assets
can be inconsistent in amount and frequency and is significantly
impacted by the timing and magnitude of our acquisition
transactions, which also vary in frequency from period to period.
Accordingly, we analyze the performance of our operations in each
period without regard to such expenses.
- Acquisition Related Costs. We exclude certain expense items
resulting from acquisitions, such as legal, accounting and advisory
fees, changes in fair value of contingent consideration, costs
related to integrating the acquired businesses, deferred
compensation, severance and retention expense. We consider these
adjustments, to some extent, to be unpredictable and dependent on a
significant number of factors that are outside of our control.
Furthermore, acquisitions result in operating expenses that would
not otherwise have been incurred by us in the normal course of our
organic business operations. We believe that providing non-GAAP
measures that exclude acquisition related costs allows investors to
better review and understand the historical and current results of
our continuing operations and also facilitates comparisons to our
historical results and results of less acquisitive peer companies,
both with and without such adjustments.
- Spin-off Costs. We exclude certain expense items resulting from
the spin-off into a newly created and separately traded public
company. These costs include legal, accounting and advisory fees,
system implementation costs and other incremental costs incurred by
us related to the separation from SolarWinds. The spin-off
transaction results in operating expenses that would not otherwise
have been incurred by us in the normal course of our organic
business operations. We believe that providing non-GAAP measures
that exclude these costs facilitates a more meaningful evaluation
of our operating performance and comparisons to our past operating
performance.
- Restructuring Costs and Other. We provide non-GAAP information
that excludes restructuring costs such as severance, certain
employee relocation costs, and the estimated costs of exiting and
terminating facility lease commitments, as they relate to our
corporate restructuring and exit activities. These costs are
inconsistent in amount and are significantly impacted by the timing
and nature of these events. Therefore, although we may incur these
types of expenses in the future, we believe that eliminating these
costs for purposes of calculating the non-GAAP financial measures
facilitates a more meaningful evaluation of our operating
performance and comparisons to our past operating performance.
Non-GAAP Net Income (Loss) and Non-GAAP Net Income (Loss) Per
Diluted Share. We believe that the use of non-GAAP net income
(loss) and non-GAAP net income (loss) per diluted share is helpful
to our investors to clarify and enhance their understanding of past
performance and future prospects. Non-GAAP net income (loss) is
calculated as net income (loss) excluding the adjustments to
non-GAAP gross profit and non-GAAP operating income and the income
tax effect of the non-GAAP exclusions. We define non-GAAP net
income (loss) per diluted share as non-GAAP net income (loss)
divided by the weighted average outstanding common shares.
Adjusted EBITDA and Adjusted EBITDA Margin. We regularly
monitor adjusted EBITDA and adjusted EBITDA margin, as they are
measures we use to assess our operating performance. We define
adjusted EBITDA as net income or loss, excluding amortization of
acquired intangible assets and developed technology, depreciation
expense, income tax expense (benefit), interest expense, net,
unrealized foreign currency (gains) losses, acquisition related
costs, spin-off costs, stock-based compensation expense and related
employer-paid payroll taxes and restructuring and other costs. We
define adjusted EBITDA margin as adjusted EBITDA divided by total
revenue. Adjusted EBITDA has limitations as an analytical tool, and
you should not consider it in isolation or as a substitute for
analysis of our results as reported under GAAP. Some of these
limitations include: although depreciation and amortization are
non-cash charges, the assets being depreciated and amortized may
have to be replaced in the future, and adjusted EBITDA does not
reflect cash capital expenditure requirements for such replacements
or for new capital expenditure requirements; adjusted EBITDA does
not reflect changes in, or cash requirements for, our working
capital needs; adjusted EBITDA does not reflect the significant
interest expense, or the cash requirements necessary to service
interest or principal payments, on our related party debt; adjusted
EBITDA does not reflect tax payments that may represent a reduction
in cash available to us; and other companies, including companies
in our industry, may calculate adjusted EBITDA differently, which
reduces its usefulness as a comparative measure.
Unlevered Free Cash Flow. Unlevered free cash flow is a
measure of our liquidity used by management to evaluate cash flow
from operations, after the deduction of capital expenditures and
prior to the impact of our capital structure, acquisition-related
costs, restructuring costs, spin-off costs, employer-paid payroll
taxes on stock awards and other one-time items, that can be used by
us for strategic opportunities and strengthening our balance sheet.
However, given our debt obligations, unlevered free cash flow does
not represent residual cash flow available for discretionary
expenses.
About N-able
N-able fuels IT services providers with powerful software
solutions to monitor, manage, and secure their customers’ systems,
data, and networks. Built on a scalable platform, we offer secure
infrastructure and tools to simplify complex ecosystems, as well as
resources to navigate evolving IT needs. We help partners excel at
every stage of growth, protect their customers, and expand their
offerings with an ever-increasing, flexible portfolio of
integrations from leading technology providers. n-able.com
© 2022 N-able, Inc. All rights reserved.
Source: N-able, Inc. Category: Financial
N-able, Inc.
Consolidated Balance
Sheets
(In thousands)
(Unaudited)
March 31,
December 31,
2022
2021
Assets
Current assets:
Cash and cash equivalents
$
70,439
$
66,736
Accounts receivable, net of allowances of
$1,636 and $1,653 as of March 31, 2022 and December 31, 2021,
respectively
33,963
33,041
Income tax receivable
8,212
7,250
Prepaid and other current assets
14,004
13,962
Total current assets
126,618
120,989
Property and equipment, net
37,481
38,748
Operating lease right-of-use assets
35,893
36,206
Deferred taxes
1,685
1,681
Goodwill
833,493
840,923
Intangible assets, net
5,603
8,066
Other assets, net
9,387
9,086
Total assets
$
1,050,160
$
1,055,699
Liabilities and stockholders' equity
Current liabilities:
Accounts payable
$
3,192
$
5,865
Due to affiliates
38
464
Accrued liabilities and other
24,303
30,944
Current operating lease liabilities
5,634
4,830
Income taxes payable
8,060
4,600
Current portion of deferred revenue
11,336
10,675
Current debt obligation
3,500
3,500
Total current liabilities
56,063
60,878
Long-term liabilities:
Deferred revenue, net of current
portion
209
223
Non-current deferred taxes
3,116
2,632
Non-current operating lease
liabilities
36,905
37,822
Long-term debt, net of current portion
334,902
335,379
Other long-term liabilities
410
410
Total liabilities
431,605
437,344
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value:
550,000,000 shares authorized and 179,915,692 and 179,049,429
shares issued and outstanding as of March 31, 2022 and December 31,
2021, respectively
180
179
Preferred stock, $0.001 par value:
50,000,000 shares authorized and no shares issued and outstanding
as of March 31, 2022 and December 31, 2021, respectively
—
—
Additional paid-in capital
607,261
602,996
Accumulated other comprehensive income
5,886
15,053
Retained earnings
5,228
127
Total stockholders' equity
618,555
618,355
Total liabilities and stockholders'
equity
$
1,050,160
$
1,055,699
N-able, Inc.
Consolidated Statements of
Operations
(In thousands, except per
share information)
(Unaudited)
Three Months Ended March
31,
2022
2021
Revenue:
Subscription and other revenue
$
90,860
$
83,190
Cost of revenue:
Cost of revenue
13,281
11,304
Amortization of acquired technologies
982
2,704
Total cost of revenue
14,263
14,008
Gross profit
76,597
69,182
Operating expenses:
Sales and marketing
31,054
25,714
Research and development
15,385
12,042
General and administrative
17,629
20,228
Amortization of acquired intangibles
1,461
6,019
Total operating expenses
65,529
64,003
Operating income
11,068
5,179
Other expense:
Interest expense, net
(3,526
)
(6,518
)
Other income (expense), net
1,059
(529
)
Total other expense
(2,467
)
(7,047
)
Income before income taxes
8,601
(1,868
)
Income tax expense
3,500
2,410
Net income (loss)
$
5,101
$
(4,278
)
Net income (loss) per share:
Basic earnings (loss) per share
$
0.03
$
(0.03
)
Diluted earnings (loss) per share
$
0.03
$
(0.03
)
Weighted-average shares used to compute
net income (loss) per share:
Shares used in computation of basic
earnings (loss) per share:
179,460
158,124
Shares used in computation of diluted
earnings (loss) per share:
180,184
158,124
N-able, Inc.
Consolidated Statements of
Cash Flows
(In thousands)
(Unaudited)
Three Months Ended March
31,
2022
2021
Cash flows from operating activities
Net income (loss)
$
5,101
$
(4,278
)
Adjustments to reconcile net income (loss)
to net cash provided by operating activities:
Depreciation and amortization
6,338
11,330
(Benefit from) provision for doubtful
accounts
(17
)
283
Stock-based compensation expense
8,169
4,749
Deferred taxes
480
(1,450
)
Amortization of debt issuance costs
398
—
Operating lease right-of-use assets,
net
(892
)
(151
)
(Gain) loss on foreign currency exchange
rates
(825
)
421
Other non-cash expenses
39
2
Changes in operating assets and
liabilities, net of assets acquired and liabilities assumed in
business combinations:
Accounts receivable
(1,097
)
188
Income tax receivable
(972
)
(546
)
Prepaid expenses and other assets
(59
)
(3,593
)
Accounts payable
(2,043
)
(3,314
)
Due to and from affiliates
(394
)
10,577
Accrued liabilities and other
(4,945
)
(1,851
)
Accrued related party interest payable
—
3,245
Income taxes payable
3,363
(2,603
)
Deferred revenue
673
160
Other long-term assets
(187
)
—
Net cash provided by operating
activities
13,130
13,169
Cash flows from investing activities
Purchases of property and equipment
(2,704
)
(2,417
)
Purchases of intangible assets
(1,141
)
(2,335
)
Net cash used in investing activities
(3,845
)
(4,752
)
Cash flows from financing activities
Payments of tax withholding obligations
related to restricted stock
(4,553
)
—
Exercise of stock options
16
—
Proceeds from issuance of common stock
under employee stock purchase plan
568
—
Repayments of borrowings from Credit
Agreement
(875
)
—
Net transfers from Parent
—
2,383
Net cash (used in) provided by financing
activities
(4,844
)
2,383
Effect of exchange rate changes on cash
and cash equivalents
(738
)
628
Net increase in cash and cash
equivalents
3,703
11,428
Cash and cash equivalents
Beginning of period
66,736
99,790
End of period
$
70,439
$
111,218
Supplemental disclosure of cash flow
information:
Cash paid for interest
$
3,057
$
3,273
Cash paid for income taxes
$
707
$
7,182
Supplemental disclosure of non-cash
activities:
Change in purchases of property, equipment
and leasehold improvements included in accounts payable and accrued
expenses
$
(483
)
$
(2,034
)
Right-of-use assets obtained in exchange
for operating lease liabilities
$
967
$
316
N-able, Inc.
Reconciliation of GAAP to
Non-GAAP Financial Measures
(In thousands, except per
share information)
(Unaudited)
Three Months Ended March
31,
2022
2021
GAAP cost of revenue
$
14,263
$
14,008
Stock-based compensation expense and
related employer-paid payroll taxes
(324
)
(185
)
Amortization of acquired technologies
(982
)
(2,704
)
Restructuring costs and other
(7
)
—
Non-GAAP cost of revenue
$
12,950
$
11,119
GAAP gross profit
$
76,597
$
69,182
Stock-based compensation expense and
related employer-paid payroll taxes
324
185
Amortization of acquired technologies
982
2,704
Restructuring costs and other
7
—
Non-GAAP gross profit
$
77,910
$
72,071
GAAP sales and marketing expense
$
31,054
$
25,714
Stock-based compensation expense and
related employer-paid payroll taxes
(2,987
)
(1,270
)
Spin-off costs
—
(339
)
Non-GAAP sales and marketing expense
$
28,067
$
24,105
GAAP research and development expense
$
15,385
$
12,042
Stock-based compensation expense and
related employer-paid payroll taxes
(1,547
)
(777
)
Restructuring costs and other
(40
)
(5
)
Spin-off costs
—
(151
)
Non-GAAP research and development
expense
$
13,798
$
11,109
GAAP general and administrative
expense
$
17,629
$
20,228
Stock-based compensation expense and
related employer-paid payroll taxes
(3,926
)
(2,890
)
Restructuring costs and other
(25
)
(8
)
Spin-off costs
(534
)
(5,625
)
Non-GAAP general and administrative
expense
$
13,144
$
11,705
GAAP operating income
$
11,068
$
5,179
Amortization of acquired technologies
982
2,704
Amortization of acquired intangibles
1,461
6,019
Stock-based compensation expense and
related employer-paid payroll taxes
8,784
5,122
Restructuring costs and other
72
13
Spin-off costs
534
6,115
Non-GAAP operating income
$
22,901
$
25,152
GAAP operating margin
12.2
%
6.2
%
Non-GAAP operating margin
25.2
%
30.2
%
GAAP net income (loss)
$
5,101
$
(4,278
)
Amortization of acquired technologies
982
2,704
Amortization of acquired intangibles
1,461
6,019
Stock-based compensation expense and
related employer-paid payroll taxes
8,784
5,122
Restructuring costs and other
72
13
Spin-off costs
534
6,115
Tax benefits associated with above
adjustments
(1,337
)
(2,225
)
Non-GAAP net income
$
15,597
$
13,470
GAAP diluted earnings (loss) per share
$
0.03
$
(0.03
)
Non-GAAP diluted earnings per share
$
0.09
$
0.09
Shares used in computation of diluted
earnings (loss) per share:
180,184
158,124
Reconciliation of GAAP Net
Income (Loss) to Adjusted EBITDA
(In thousands)
(Unaudited)
Three Months Ended March
31,
2022
2021
Net income (loss)
$
5,101
$
(4,278
)
Amortization
3,143
8,722
Depreciation
3,195
2,608
Income tax expense
3,500
2,410
Interest expense, net
3,526
6,518
Unrealized foreign currency (gains)
losses
(825
)
421
Spin-off costs
534
6,115
Stock-based compensation expense and
related employer-paid payroll taxes
8,784
5,122
Restructuring costs and other
72
13
Adjusted EBITDA
$
27,030
$
27,651
Adjusted EBITDA margin
29.7
%
33.2
%
Reconciliation of Unlevered
Free Cash Flow
(In thousands)
(Unaudited)
Three Months Ended March
31,
2022
2021
Net cash provided by operating
activities
$
13,130
$
13,169
Capital expenditures (1)
(3,845
)
(4,752
)
Free cash flow
9,285
8,417
Cash paid for interest, net of cash
interest received
3,057
3,273
Cash paid for acquisition related costs,
restructuring costs, spin-off costs, employer-paid payroll taxes on
stock awards and other one-time items
1,175
6,327
Unlevered free cash flow (excluding
forfeited tax shield)
13,517
18,017
Forfeited tax shield related to interest
payments (2)
—
(868
)
Unlevered free cash flow
$
13,517
$
17,149
____________________
(1) Includes purchases of property and
equipment and purchases of intangible assets.
(2) Forfeited tax shield related to
interest payments assumes a statutory rate of 26.5% for the three
months ended March 31, 2021.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220511006162/en/
Investors: Tim O'Brien ir@n-able.com
Media: Kim Cecchini Phone: 919.957.5019 pr@n-able.com
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