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Good morning, everyone, and welcome to the N-able First Quarter 2025 Earnings Call. My name is Angela, and I’ll be coordinating your call today. [Operator Instructions] I will now hand you over to your host, Griffin Gyr, Investor Relations Senior Manager to begin. Griffin, please go ahead.

Thanks, operator, and welcome everyone to N-able’s first quarter 2025 earnings call. With me today are John Pagliuca, N-able’s President and CEO; and Tim O’Brien, EVP and CFO. Following our prepared remarks, we will open the line for a question-and-answer session. This call is being simultaneously webcast on our Investor Relations website at investors.nable.com. There you can also find our earnings press release, which is intended to supplement our prepared remarks during today’s call. Certain statements made during this call are forward-looking statements, including those concerning our financial outlook, our market opportunities, and the impact of the global economic environment on our business. These statements are based on currently available information and assumptions, and we undertake no duty to update this information except as required by law. These statements are also subject to a number of risks and uncertainties, including those highlighted in today’s earnings release and our filings with the SEC. Additional information concerning these statements and the risks and uncertainties associated with them is highlighted in today’s earnings release and in our filings with the SEC. Copies are available from the SEC or on our Investor Relations website. Furthermore, we will discuss various non-GAAP financial measures on today’s call. Unless otherwise specified, when we refer to financial measures, we will be referring to non-GAAP financial measures. A reconciliation of certain GAAP and non-GAAP financial measures discussed on today’s call is available in our earnings press release on our Investor Relations website. And, now, I’ll turn the call over to John.

Thanks, Tim. Our earnings reflect continued progress advancing cyber-resilience for businesses worldwide. Our customer confidence demonstrates a continued belief in the value we deliver. And our industry accolades are proof points that our efforts are resonating. While evolving trade policies can create uncertainty, cyber threats don’t pause and neither do we. The launch of new security capabilities, the growth of channel partners in our partner program, and our largest new bookings deal ever, showcase that N-able is innovating and growing. We look forward to building on this progress throughout the year. And with that, operator, you’ll open up the line for questions.

Thank you. [Operator Instructions] The first question comes from Mike Cikos with Needham. Your line is open. Please go ahead.

Thank you. The next question comes from Brian Essex with JPMorgan. Your line is open. Please go ahead.

Hi, good morning, and thank you for taking the question. I guess, first question is just overall view on the market and the health of the spending environment, particularly after – beginning of April, when things seem to have gotten a little bit noisier from a macro perspective. We’d love to hear what you’re hearing from both enterprise customers and MSPs and how they’re experiencing the current spending environment?

Sure. Good morning, Brian. This is John. Thanks for the question. Look, whether it be data protection or the thwarting of the threat actors, the need for a cyber-resiliency, it’s a must, right? It’s not like a nice to have. So, we continue to see the demand, and that’s both reflected in our bookings and our pipeline remains strong. So, we’re not really hearing – we’re not really seeing any major differences from the demand point of view. The offerings continue to resonate in the market. That being said, I’d say anecdotally, with some of the channel checks, we do hear folks talking about certain deals taking a little bit longer or just a little bit more of a measure twice kind of cut-wise it’s approach before folks are launching a big project. But, overall, demand remains strong and the offerings continue to resonate in the market.

Got it. Very helpful. Thank you.

Thank you. The next question is from Matt Hedberg with RBC Capital Markets. Your line is open. Please go ahead.

Great. Thanks for taking my questions, guys. John, I wanted to ask you about the reseller traction. It seems really exciting as another growth vector. It sounds like we’re still early. I kind of wanted to see like where are we at? Like, I don’t know. What inning are we in that kind of reseller motion? And, how do you think about potentially that aiding growth this year? I have to imagine you probably haven’t embedded a ton in guidance for that. But just sort of curious on that element.

Yeah. Hey, Matt. Great question. Yeah. And so just maybe to remind the audience a bit, we’ve traditionally been focusing on the route to the SME or mid-market via the MSP. And, now, we’re widening that net, so to speak, and really beginning to invest a little bit more in other type of channel participants, value add resellers, even some SIs and some of the folks like that. Matt, I’d categorize it as early innings for sure, but it’s already seeing some green shoots. We’re focusing right now on adding resellers, active resellers both in North America and international. Part of the one of the benefits from the Adlumin acquisition is they had a reseller network in the U.S. And so, what we’re doing there is we’re adding to that network, but we’re also now giving them adding other items for their shelf, so to speak, in their line card with Cove and with our UEM offerings, and so that’s been getting some good traction. And then in Europe, we’ve added some cams in the UK, we’ve added some cams in the dock markets. And those are already starting to throw off some green shoots. And so, our business, I often refer to it as a snowball business, 20,000 plus customers. And so, we’re lining up those pipelines. We’re starting to get deals. Bookings are starting to come in. It will have an impact on 2025, but not necessarily material just because of the nature of the way the snowball kind of builds. We do expect it to have a bigger impact in 2026. But so far, so good. The demand is there. The products resonate, and we’re really beginning to seed, and we’re starting to see that pipeline build nicely.

That’s fantastic. Yeah. It does seem like a really interesting additional growth vector versus historical MSP distribution. I guess, the other thing that that really stood out to me, John, you mentioned it kind of earlier in your prepared remarks, was sort of the your VM management solution. We often hear of a lot of customer issues with sort of that both the VM side and the patch management side, especially, I can imagine that’s even more relevant in the SMB space. It sounds like you’re having some strong early traction with that as well. Wondering if you can give us a little bit of sense too on maybe where you’re seeing that success. And is it competitive displacements? Or is it the case where they may be not using anything for VM in some of your customers?

Sure. When we surveyed our managed service providers in particular, the two biggest areas of need were around security operations and XDR, MDR activity, and a close second was Vulnerability Management. Matt, I’d say it’s a hybrid. Some have disparate tools that they were using. No one really had it in one unified platform inside their UEM. And so, this is definitely will be a differentiator in our UEM for sure. We’re starting with the scanning of endpoints in the applications. Then, we’re going to add to that and add on with scanning of networks and then to the cloud. And so, I’d say it’s a little bit of a hybrid in that. We’ll probably be displacing some folks at the first tranche or the first horizon with the endpoint, but that will be a little bit more of a greenfield or blue ocean, so to speak, with the network and definitely with the cloud. And so, it’s really exciting. Right now, we actually have it, it’s actually included in our UEM. We’re not charging our MSPs for it, and it’s showing up. Look, often refer to this as left hand, right hand clapping, right? You need to scan and understand what the vulnerabilities are, and then you need to patch. Our patching, we believe, is best-in-class. The level of automation, the level of policies that folks can do, it all goes squarely right into our mission, right? We’re helping these MSPs be more secure, helping their customers be more secure and making sure they can do this effectively and efficiently. So, this is right in the crosshairs of really our mission. And like I said, this was the number one of the top two priorities that MSPs were looking for. And it really frankly is a gap in the industry. We know that there’s a lot of enterprise players, and some of our MSPs are forced to use some of those enterprise players. And it might be a little bit heavier than what an MSP needs. They’re not necessarily architected in an end tier so that they can deploy this across their group. And, now, what an MSP can do is run certain and common policy across all of their customers, which drives a tremendous amount of efficiency. So, we’re really excited about it, and the reception has been great. We announced this in Berlin at our Empower event. And we had 500 plus attendees there, and the place went nuts. Literally, the audience started screaming when our CTO announced that this is going be included in N-central and N-sight, both of our UEMs. So, we’re looking forward to it. This will help us make the platform stickier. This will help us displace competitors as we’re going in because the competition does not have this. So this is truly a differentiator.

Okay. Best of luck, guys.

Thank you. The next question is from Keith Bachman with BMO. Your line is open. Please go ahead. Hello, Keith, your line is open. Please go ahead.

Okay. Great. Thank you. Then the second question is sort of where Brian was digging in a little bit. You mentioned that there’s more scrutiny on deals. Just to be clear, though, is the pipe the same, but there’s deal elongation or you’re even seeing the deal elongation or sales cycle expanding? Is there any change in the cadence is really work?

Yeah. This is John. What I mentioned is there are really more anecdotes that we’re saying. But that being said, we wanted to maintain, I would say, a prudent kind of outlook given some of the uncertainty. But no, look, the bookings are strong. The pipe remains quite strong. And, we’re not really seeing anything that’s materially different in the metrics. But, it’s more some of the anecdotes that we’re hearing from some of our channel checks, not necessarily what we’re seeing in our direct business.

Okay. Perfect. Many thanks. That’s it for me.

Thanks, Keith.

Thank you. The next question is from Jason Ader with William Blair. Your line is open. Please go ahead.

Okay. Very helpful. Okay. Good. And then, on the customer expansion side, can you just talk about, I don’t know, any anything that you didn’t talk about in the prepared remarks in terms of some of the things you’re working on, bundling or other initiatives, go-to-market initiatives? And then, specifically, like what metrics should we be looking at going forward to check on the success of some of those initiatives?

Hey, Jason. This is John. Yeah, look, so one of the things that the Adlumin acquisition afforded us is if you think about the economic stack that we bring to market, that’s now $30 per user per month, right, and which – the Adlumin ASP by itself was anywhere from $5 to $12. So, it’s a substantial uptick in our economic stack. And that allows us the ability to do a little bit more of a bundling and packaging, which will help our customers, both the mid-market customers and the MSPs. What we believe is that at the mid-market and at the low-end in particular, if you’re buying things in a silo, those silos are not as efficient, not as effective and potentially not as secure. So by bundling via one kind of platform, the end customer is getting the benefit of that. And so, we’re going to package that up, that should drive, that will drive, our ASPs up. What you can look for proof points there, an acceleration in ARR, an uptick in NRR as well as we go through, because we should get some of that cross-sell as we go through. And, we tried to give a little bit of an example of that in the prepared remarks. I mentioned that 300 employee healthcare organization, right? And that’s a high 5-figure ARR deal. Before Adlumin, that might have been more like a $12,000 to $14,000 ACV type of deal, it was just UEM or one of our offerings. But now bundling that together, we’re getting 4 or 5 times, 6 times the ACV for a 300-person organization or a 300-device MSP. So, the bundling and packaging, I expect to actually have benefit both on the low-end and the high-end, but maybe even an overweight impact on the lower end of the market, because that’s really where they can drive some of the economic benefit for themselves, but more importantly, drive the efficiency for the technicians that those organizations are frankly a little bit overstretched if they’re using more of a siloed approach.

On the end market side, is that where you’ve seen most of the success for maybe some of your competitors like in the low-end of the MSP market, just some of that kind of full platform?

Yeah. So, let me split that answer up, because it’s important. The Adlumin automated SOC, that’s resonating on the low-end, that’s resonating in the middle, that’s resonating in the high-end, that’s resonating in the mid-market. Like that remains our fastest growing SKU and the cross-sell has been really, really strong across all the entire spectrum. Yeah, the bundling, I’d say the success is a little bit more on the middle to the lower end.

Very good. Thank you.

And, frankly, we’re actually really just getting started with some of that, where it’s more, I would say, in testing and we look to bring a little bit more of that systematically to the back half of this year and into 2026.

Thanks.

Yeah, good question.

Thank you. The next question is from Joe Vandrick with Scotiabank. Your line is open. Please go ahead.

Yeah. Thanks for the question. John, if you could talk about traction you’re having with Adlumin. Remind us what’s the catalyst for greenfield adoption. Is it typically a breach, someone trying to get cyber insurance, maybe some other reason? Really just trying to understand why this market is poised to take off now.

Sure. Thanks, Joe. Based on our research, but also research of analysts in the space, I call it, the XDR/MDR is really a blue ocean type of market for the MSPs. I’d say the majority and we’ve seen as low as 55% and as high as like 70% depending on the survey do not have a solution in place today, so that’s exciting. What’s driving that? You kind of hit it all. I’d say it’s like hitting for the cycle, right? Yes, if somebody has a cyber-breach or an incident, that’s a catalyst if it’s a need for insurance. Or, hopefully, it’s also SMBs, mid-market companies and MSPs being proactive saying that they can’t handle threats that are needed. They can’t handle it. They shouldn’t be building a SOC. It’s millions of dollars for a lot of these managed service providers or mid-market companies to build a SOC. So, if they can rely on a company that’s leveraging AI to help them in a much more automated way, search for threats and thwart the threats. And the biggest part of the Adlumin solution that we believe is a differentiator is what we refer to as big R and that we remediate. So, before a customer can even be – they can be sleeping and we’ll already take action and remediate. One of the more interesting things that I mentioned this in the prepared remarks, we also went to market with Microsoft 365 breach prevention. Right? So, we were at RSA last week, the first time N-able was ever an exhibitor at the cybersecurity event in San Francisco last week, and one of the big themes is identity. And M365 really is one of those bits that’s effectively completely automated. And we’re seeing any anomalous behavior with the signing in or just the logging in or a user or an identity under M365, which you can imagine covers a large part of my base, we can actually shut down that access. And so, whether it be a mid-market company or an MSP, they could still be sleeping, and we’ll take action for them on their behalf, making sure that there’s no lateral movement, making sure that that person no longer has access to their information. So what might have taken hours before in prior technologies is now taking minutes for us to detect and then respond and go from there. And that’s resonating in the market. It’s a differentiated approach. It’s very much an AI-powered automated SOC, and it seems to be really resonating.

That makes a lot of sense. Okay. And you’ve also talked a lot about the value of selling the entire platform. I think I heard the word platformization. So I’m curious, is there an effort to like integrate all the offerings together into like a single pane of glass? And does that add further value? And where are you on that journey?

Sure. When you think about the technicians’ need, it’s really about the workflows and that culminates or people speak to it as a single pane of glass. But the reality is it’s all about automating of the workflows. So, what we have is effectively three best-in-class offerings, our Cove data protection offering, our UEM offerings, and the Adlumin offering. So best-in-class. So if a mid-market company or an MSP has a need for one of those three offerings, they can consume that. And then, frankly, we do pitch and do believe that it is a better together story. It makes the MSPs or the technicians more efficient. It makes the solution more effective. And why? It’s because the workflows. They don’t need to log on. They don’t need to manage up the roles-based account controls and all the access is there, pushing and pulling of the data. We can automate things. We can make the offerings more secure by looking at if there was any anomalous detection. So I’ll give you an example. We actually had a customer that was using both Cove and Adlumin and a breach was detected. So that breach was remediated. And just for belt and suspenders approach, because they had Cove, they were able to go back and recover from the previous day just to make sure that there was no threat actors in their environment, none of their data was corrupted. And so that’s a good example of the cyber-resiliency platform where we’re detecting, we’re remediating, and then we can recover just to make sure that the environment’s clean. And, we believe that having that complete resiliency story is differentiated both for N-able, both for the MSPs we serve and the mid-market companies that are dealing with the threats.

Yeah. Thanks so much for taking my question.

Thank you. We have a follow-up question from Mike Cikos with Needham. Your line is open. Please go ahead.

Thank you. We currently have no further questions. So, I hand back to John for closing remarks.