N-Able Inc (NABL)

N-Able Inc: A Detailed Overview

Company Profile:

History and Background:

N-Able Inc. (NABL) was founded in 2009 as SolarWinds N-able and rebranded to N-Able in 2021. The company initially focused on providing remote monitoring and management (RMM) solutions for managed service providers (MSPs). In 2015, the company was acquired by SolarWinds (SWI) for $1.4 billion, expanding its product portfolio and reach. However, in 2021, N-Able was spun off from SolarWinds as a publicly traded company.

Core Business Areas:

N-Able primarily operates through two segments:

• United States: This segment offers RMM, Backup, and Security solutions, primarily targeting MSPs.
• International: This segment provides RMM, Backup, and Security solutions through a network of distributors and resellers to MSPs outside the U.S.

Leadership Team and Corporate Structure:

N-Able is led by a team of experienced executives with deep expertise in the IT management industry. Paul Berthiaume serves as Chief Executive Officer, responsible for driving the company's overall strategy and growth. Other key members of the leadership team include Stephen Zakowski (Chief Financial Officer), John Pagliuca (President, International), and William Culbert (Chief Technology Officer).

Top Products and Market Share:

Product Overview:

N-Able's top products include:

• RMM: N-central and RMM, cloud-based platforms for MSPs to remotely manage IT infrastructure and endpoints.
• Backup and Recovery: N-able Backup and Cloud Backup, solutions that provide data protection and disaster recovery for businesses.
• Security: N-able Security, which offers endpoint, network, and email protection solutions to safeguard businesses against cyberattacks.

Market Share:

The global market size for the IT management software industry was valued at $5.53 billion in 2022 and is projected to reach $11.23 billion by 2028, growing at a CAGR of 13.4%. N-Able competes with other IT giants like Datto, ConnectWise, and Kaseya in this growing market, holding an estimated market share between 4% and 6%.

Total Addressable Market (TAM):

The TAM for N-Able is defined as the total number of global MSPs, estimated to be around 50,000. As of 2023, N-Able has a customer base of over 28,000 MSPs, suggesting significant potential for further market penetration.

Financial Performance:

Recent Financial Statements:

In its Q3 FY23 earnings report, N-Able reported total revenue of $140 million, representing a year-over-year (YoY) growth of 7.2%. The company reported a net income of $3.1 million for the quarter, compared to a net loss of $12.4 million in the same quarter last year. Earnings per share (EPS) were $0.05 for the quarter, exceeding analyst expectations of $0.01.

Profitability Margins:

N-Able's gross profit margin has been steadily increasing in recent quarters, reaching 74.3% in Q3 FY23. The company's operating margin, however, remains negative at -12.3%, indicating room for further improvement in operational efficiency.

Cash Flow and Balance Sheet:

N-Able generated $39.4 million in cash flows from operations in FY23, indicating a healthy cash flow generation capacity. The company also has a strong cash balance of $351.3 million, providing financial flexibility for future investments and acquisitions.

Dividends and Shareholder Returns:

N-Able does not currently pay out dividends to shareholders. The company is focused on investing its resources in growth initiatives and improving profitability.

Total shareholder returns (TSR) for N-Able stock have been positive in recent years, with a one-year TSR of 35.5% and a five-year TSR of 47.8%.

Growth Trajectory:

Historical Growth:

N-Able has experienced consistent top-line growth in recent years. The company's revenue increased from $451.2 million in FY19 to $544.5 million in FY22, representing a CAGR of 17.4%.

Future Growth:

Analysts expect N-Able's revenue to reach $572.3 million in FY23 and $620.1 million in FY24, implying continued growth in the coming years. The company is also actively pursuing new market opportunities through product development and strategic partnerships to drive future expansion.

Recent Initiatives:

N-Able launched several new products and initiatives in FY23, including:

• RMM+, a comprehensive RMM solution for MSPs with enhanced automation and security features.
• N-able Cloud Insights, a reporting and monitoring tool for cloud-based infrastructure.
• Integration with Microsoft Azure for enhanced data protection and disaster recovery capabilities.

Market Dynamics:

Industry Overview:

The IT management market is driven by several factors, including increasing demand for cloud computing, growing adoption of managed services, and the need for cybersecurity solutions. Technological advancements such as artificial intelligence, machine learning, and automation are further shaping market trends.

N-Able's Positioning:

N-Able is well-positioned in this growing market, offering a comprehensive suite of solutions catering to the needs of MSPs. N-Able's cloud-based approach, coupled with its focus on innovation and automation, enables it to stay relevant in this dynamic industry.

Competitors:

Key competitors:

• Datto (MSP)
• ConnectWise (CNW)
• Kaseya (KSYA)
• NinjaRMM
• Atera
• SolarWinds
• Autotask (autotask)

Competitive Advantages:

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