NABL - Earnings call transcript Q3 2021

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Operator

Hello, everyone, and welcome to the N-able Third Quarter 2021 Earnings Call. My name is Charlie and I will be your coordinator for today's call.

You will have the opportunity to ask a question at the end of the presentation. [Operator Instructions]. I will now hand you over to your host Howard Ma, Senior Director of Investor Relations, to begin. ahead. go please Howard,

Howard Ma

and me to N-able's today Tim CFO. CEO, Charlie, earnings President third-quarter call. and and EVP With are O'Brien, welcome, you, N-able's everyone, XXXX and Thank John Pagliuca,

the we our global on statements, completed information and call press spinoff XXXX, the website our This simultaneously at will economic July environment Following in There to being assumptions and remarks, those open line can duty on also are question-and-answer is Investor for our currently and on earnings available you the to we intended following These this webcast no business of our investors.N-able.com. based session. today's a required as Relations from is which forward-looking undertake find this our to SolarWinds those are except call. of prepared related These also call and the July. to the during uncertainties statements made impact update by business. continued of statements prepared law. our statements financial during release, our transaction supplement remarks Certain a opportunities, in are outlook, risks including including concerning number market subject our information our spinoff expectations

discussed our I John. website. A to to IR Copies release statements measures. SEC. we information our otherwise Furthermore, refer are is today's them we referring is available call we non-GAAP be over the non-GAAP earnings on measures unless reconciliation and will IR financial the on Additional highlighted website. these on available call and the non-GAAP uncertainties financial certain from When call concerning or in press financial on filings will of our now release measures, GAAP risks the earnings today's associated our And on turn will with specified. today's to with discuss financial measures and various SEC to in

John Pagliuca

you today. all for joining and us Howard, thank Thanks,

to phrase believe months my execution. in ago and, entire MSP with N-able what successful few to deliver in seeing the shows energy. was want still the the for on that express I in the rearview fourth staying Together, employee in and partners gratitude sentiment to and only our across quarter. that the base Forward leveraged the team renewed First and hard rewarding third It's everyone off, drive spinoff. around quarter has operational that and on a has organization, a MSP focused transaction the to to and already our rallied a N-ableite to our We mirror, performance been serve milestone ownership really are It entire witness partners our we it to

our points of benefit. Our third-quarter the representing FX included approximately approximately XX% which of high-end outlook, growth, $XX.X year-over-year X million exceeded percentage revenue of

Our on net customers. XXX% remains leveraging basis, XX-month while trailing base across reflecting a retention consistent rate expansion partner healthy at our

a world don't their differentiate digital looking cyber and IP with to is distributed have evolution business and ever-growing enable with big enterprises and For in ARR represent N-able the platform, tailwinds. industry Businesses of those small a ARR of total believe around XX% dynamic with to and the and deal workforces complexity as both means represent medium of small on threats. quarter is We accelerating that $XX,XXX now more end. well-positioned across of increasing environments or devices. our The variety

aligned mission-critical Meanwhile, customers. both with their IT of and and MSPs IT are recurring vendor have in core aspect needs. a needs as MSPs built-in We products to to need heightened SMEs to security a quarter the security that broadly we all scrutinizing some we IT is serve for the vendor essential and trends, is rely believe key to our focus bring all will continue including increasingly wins on for service As MSPs, mind standardization, workforce end SMEs proactive cybersecurity. growth. Cyber services. shared strength on result, for demand share the people, types, more are on prevalent. in providers and and and be service effective which our supply of top of are quarter, mechanisms in The partners. and a Security the was all and in and mind, more vulnerabilities technology our in cyber our investments that become overall ability illustrate security offerings is within ecosystem. power MSP Partners increased for and protocols. culture wanted with we the phishing the to ransomware then within management We outpacing and of the security chain criminals responsibility saw attacks providers protection conversations the capitalize more of N-able's to intensely sizes revenue processes companies technology industry as continued increasingly committed have N-able's robust platform model exploit we With MSP the and data platforms I security of consolidation made

signed a intelligence, deal, incumbent six-figure backup displaced MSP First, which with RMM, security including multiproduct an dedicated competitor. our a EDR, a US-based practice ARR risk and

offerings, in Our breadth deciding and the success partner security of factors this win. were programs capabilities

six-figure chose automation a platform, our standardize ease-of-use, our Second, acquired a deal that Netherlands also strong to partners on RMM MSP based recently ARR to and due capabilities. extensibility four our

product ARR MSPs matter approach for in are market in with that. indicate multiple world Third, which was around strategy. and existing onto one. a in our an as after was reflect success scalability, process, competitive standardize figure a US-based automation ultimately to resonating prove strategy, RMM leadership the mix And acquirer the due deal. partner demands. thousands and to our of the that The large acquired and part five of RMM N-able the with of We success similar and to our messiest partner capabilities situation, tens platforms looking partners programs, chose resulted standardization rollup a most plays These our partner

in had expansion also some deals We notable the quarter.

separate vendor due via competitive a on to RMM the a for of for deal in that processes, in labor also standardized our key our preferred US-based the reduction ability a ARR was companies' EDR, costs figure a drive First, automation resulting to efficiency while six through adopting division resulting partner MSP. RMM of vendor using

Second, win MSP cross to ARR a we EDR an posture. had a has sell years customer upgraded they Canadian five five as been that endpoint figure over security RMM for their

UK-based a had we a figure cross protection sell to Third, large ARR data five deal MSP.

cloud-based to comprehensive we image with a our displaced highly fast, that fully cost-effective. approach and backup Here is recovery competitor

success platform's go-to-market across several seeing we and a our technology fundamental of From pillars security are strategy. We extensibility. win perspective, that areas of our scalability, reflect because

powerful enables which deliver customers while to that to need is and profits easy partners earning higher high-value Our use, themselves. to technology for them end their

integration customers. is with increase being our EDR leveraged win both MSPs within existing their to to instance, by many solution, by For and native new customer revenue SentinelOne, powered base

allows challenges threat Every and and technical to security all-around and issues to automation I sales behavior for are increasing operation based containing advanced business success to Partner their on as customers component rollback day critical centric Institute, managers their partners makes also the success and solve investments educating with resolve off. it with times identify Nerds proprietary security help is those EDR of partner engineers partners MSP MarketBuilder to to that engineers our partner create evidence margins. return decrease leverage possible packages faster while Our They paying are team resources efforts highlighted detection and The to Head help deals work risk while success partners our partners a capabilities. It them our features. challenges. such connect customer success expansion culture.

us to allows innovation, market customers, to and on which Our products listen from meet how customer best our bring to success focus what directly new partner informs needs. learn to and

some wanted scored, managed XXXX card annual first of major best-in-class recognized We highlights. third-quarter including product three report MSP partnership product platform, and I services. along, were innovation, in four to categories in share as cloud ranking the and Moving CRM's

Our Mail Bulletin's false with security Virus solution Assure email positives. rating spam zero verified plus received

only has a addition also marks stack, ecosystem looking provide on enabling an By of look using limited illustrates integration We of approach. have QX offering environments our integrating This as providers, not ahead engine third-party glass product Microsoft flexibility manage capability. and partners and important natively Microsoft but is to MSPs our solution that leading And been with we framework in the customer value pane continues extensibility live single for our DNS powers security devices. technology the filtering our differentiated preview a customers now to this in over ecosystem positive. early to our feedback front, desire. XXX Our number a via our to and

continues our this to that Additionally, This customers. to a was diligently our support upgrade help Windows new and to major N-able their transition upgrade. system. prospects the Microsoft XX experience solutions a significant partners and release released migrate the and for recently partners to fully event ensure work operating

Mac this the OS by We end will fully Monterey Apple's support of quarter. new

Now I on we've made over the and through call recruiting before the will efforts turning Tim. marketing touch to branding, progress

to we of getting N-able tenfold, March, SolarWinds six MSP. months for number new nearly we monthly resonate. what While takes surpassing brand rebrand, for queries fully in time the a officially were the as About rebranded has after it search multiplied

monthly name period in significantly of to qualified change. from year our comparison number the addition, ago generated same In increased before queries opportunities has the a brand

by demonstrating relative of refine to N-able value to We story and competitors. solutions continue will improve the Why the our differentiated

story and to revolving is existing we website positioning key and our Our the our partners. are proposition, demonstrate vehicle for presence value prospects and a online

call our model And that activities focused to talent trade quarter remain plan we based and webinars. growth shows, working we our with least, trust colleagues. more participation last Work, meaningful third a engaging hiring for interactions In and our events, flexibility hosted on We initiatives. marketing and but not retaining videos what which we Way hybrid top support in we supports Additionally, is to launched the on increase The N-able

now innovative support and N-ableites the of We are you. Thank turn more than outlook. Tim for base ways review results our exploring to to around will our call QX X,XXX committed a financial world. I over growing of the to

Tim O'Brien

the that thanks prior you, the I SolarWinds a and as part of third-quarter our will day of period, financial XX a us of for call start our to Thank results sub still joining completion a all John, today. note which to operated with spinoff. contain we out you during on

quarter, on calculated N-able For be results those in fourth financial completely will the Starting presented carveout financials a standalone our were XX basis. days, methodology. using

mentioned, a N-able on EDR revenue performance revenue in XX% legacy security total discontinued increase of of $XX.X points staff year-over-year, solutions and Dollar-based license in our million, John approximately $X.X represented outside revenue quarter $XX.X protection was a million, first approximately million, year-over-year. From the Subscription perspective, Revenue XX% XX% cloud-to-cloud Quarterly was of our backup by revenue and growth. XXXX. included which benefit. the year-over-year, Other a revenue the driven maintenance represents X FX we of geographic is revenue was and from was that America XX% be calculated continued primarily third XXX%. and an basis, down of from overall increase retention, model quarter XX-month As total. data North trailing solutions. outpaced revenue net of an to

with rates ARR, now X,XXX where a expansion growth of we healthy XX% existing end partners Partners powered that acquiring of the grow total more our by or when been and a ARR up partners increase. model enabled ago. have N-able represent Our services driven the of ended manage XX% and We when deliver represent our customers $XX,XXX year by more year-over-year partner devices ARR XX% incremental quarter over with acquire partners they from new $XX,XXX by with platform. us, new

a Turning exclude the basis stated, items to that, margins, measures GAAP otherwise non-GAAP references and to profit to note reconciliations press profit are unless expenses provided outlined today's in and the release. in on calculated all and non-GAAP

million, in margin EBITDA compared Third-quarter free of of in XX.X% margin contained EBITDA two was $X.X approximately one-time quarter million items. XX.X% cash Adjusted $XX.X the representing the an XXXX. quarter gross flow third XX.X%. adjusted Unlevered was to was and

and spinoff of a repayment spinoff. to $XX trade million time to cash of The outflow $XX net related occurred intercompany a prior which to first payables our SolarWinds the the peg at million representing was

was CapEx Philippine's the from office to SolarWinds $X.X second was in This in The the million transfer transfer of cash to related us neutral. assets that line. our recognized is

office $XX.X CapEx $X.X of to Excluding the CapEx these revenue. have just in or free Philippine's mentioned. asset X% that million, been two million of transfers would $X.X cash items contained quarter. unlevered was approximately I related our flow million

approximately We Excluding approximately $XX $XX quarter end million million revenue. was ended that, second weighted or of X.X% share of in third from with based the quarter. CapEx on at diluted up the earnings shares. $X Non-GAAP would have average approximately the per of XXX.X been million $X.XX the million quarter cash,

outstanding representing leverage times. of principal net Our X.X balance was approximately $XXX million loan

Now and financial quarter our I year. fourth the will outlook provide full for

three of see the improvements followed which had efforts, generation to ARR rates expect impact million current quarters total quarters Based cyber by reported start quarter rates, due of For representing started fourth the impact to quarter. to growth. on revenue COVID year. quarter fourth we flow-through and was after we the we on both second year-over-year of in has Note challenging demand in million, and relative and to $XX.X a impact on first revenue the tougher on In following to fourth FX XX% in the the rebranding the the XXXX new expansion neutral expect fourth incident quarter of slowdown XXXX. to third quarter. approximately XXXX, comparison have $XX third Sunburst year-ago that a the This

adjusted at expect XX% midpoint. million $XX fourth-quarter $XX.X approximately to We of representing EBITDA million, the margin

year the total raising full XXXX to million representing we For revenue of year-over-year to growth. are XX% $XXX million, expectations $XXX.X

approximately XXXX. year of X for percentage expect FX We the full benefit points

of EBITDA our outlook a the at million to a XX.X% or to raising adjusted $XXX.X are million margin XXXX $XXX.X We midpoint. for range

spinout-related in CapEx the We $XX million timing primarily expect to range elevated $XX office of to quarter of the fourth due outs. build in million

in return We to expect approximately of CapEx XXXX. to revenue X% starting

the outstanding average the year. fourth and We XXX expect approximately million total XXX weighted of for million quarter approximately diluted in shares full

in tax be rate both approximately the We fourth the and quarter XX% to year. non-GAAP full our expect

will I turn for over it to remarks. Now, closing John

John Pagliuca

first standalone company. our full was QX Tim. as almost Thanks, quarter a

And separating out a are hire SolarWinds, on executive pandemic. talent important focused a While foundation. we of while to top recent from of on remind this all execution, and successfully including our did continuing it's new this ourselves building rebranding, top team achievements, we weathering to

post-pandemic working just model. entered for them help are of differentiate this service type but to businesses of to to a hybrid ensure used all new a MSPs who us and for period where new not have secure. robust, are to that offerings sizes is are the We time of ramping up, a scalable economy, In looking their worker environment

part it provide we We our beyond and resources that integral customers. ability of are proud we education the their they that land, of support is the above their and grow our training, MSPs' our one We marketing software And are retain and an as award-winning platform, is expand with keys to guidance and to grow. them success.

and in that As it our we XXXX, support the partners bright is focus up people the on Company. acceleration the for us our of future the sets of teamwork for

initiatives partners take ahead we partner we invest to mind we As and motions, ensure deliver we that, innovation and With our forward. look top our remain for in will continue success going go-to-market to ready of to are operator, questions.

Operator

[Operator Matt Markets. Capital RBC Instructions] Hedberg,

Matt Hedberg

these you overall even noted momentum in my taking And said accelerating quarter. you business really was you thanks a this questions. XXXX. customers? with the it finer there. that though, of success on sort why you're point, me is in of specifically to an it business, product? out assume having of larger but the I evolution Is on put large lot just Good focused a and you're for Can in guys, it's the so of stood John, Great, customers growth really impressive things, lot in morning. growth a of some

John Pagliuca

for question. good appreciate morning Matt, the and and couple you of on hopping thanks a things. Hey, It's

market macro seeing we the are on First, level, the mature.

the the as seeing industry are kind golden to the MSPs consolidate. And the MSPs. era starting era are now in we in to MSP right for Some refer of we

come to the beginning, just where larger midmarket. the Matt, into maturing are not also into and but money smart really opportunities, are MSPs some the get they seeing are SMEs space We

that lends so, our MSPs. security more they just bumping And And our strength. the and to environments We MSPs of one. handle depth bigger, offerings two, these frankly, as grow, -- number mature our are that platform plays now to into, platform really RMM number itself breadth complex

our win to as ourselves to us MSPs the matures, frankly market area. size strategy, think to in positions continue both our continue I As platform, and grow that these in and maturity

So, combination well offerings. into and and ability of success kind more even environments them in on being and I depth MSPs it's and our biz security able the in bespoke of plays dev this more that That's one-two to in partner you their of in of macro manage these the it concept with then And going the what's the a couple strategy, for. punch call that to are what on. looking so give helping really our would complex breadth MSPs with

right the for I is think it MSPs. combination larger these

Matt Hedberg

like looks you. for one certainly it And No, Tim, then, resonating. it’s

now comments year, your be going you sure think terms compare the of why seasonality about particular. about in than Obviously us start a the little us just make XXXX, next as seasonality wondering, that and on to thinking next of to QX, to a about QX can Your remind year growth with currency we I’m you’re from different is But cycles. bit we’re in help But just I business? want – demand SolarWinds. carveout your appropriately or

Tim O’Brien

Matt. for question. the sure, Yes, Thanks

we it’s business. of model we linear; have out fairly anything terms periods look to any terms or we seasonality, would in seasonality say hockey like much in that have stick the In don’t don’t to of I XXXX. how

Operator

Mike & Cikos, Company. Needham

Mike Cikos

Hey, guys, here. the thanks questions for taking the

XQ that earlier I'm you more I I and about I outlook calendar early the you maybe the XQ in about the And lead -- pause expected in to year us should of we are now it think lead if things help hit there GEN as Or XXXX. those of here, at calendar we're pause be button we XXXX. through trying thinking the if mostly about guess on just one guys together that? looking and still currency as but far thinking have impact XXXX be in could, XQ as as understand comp one, an put QX? growth on then incremental. Anything difficult we're this to would for Another there? the activity activities. had Can GEN calendar we're exit is

Tim O'Brien

some Yes, give color. to

of a cyber we like coming rebrand in we COVID. had results. to some it in to think business out two business slowdown said gen So matriculate things quarter for they matriculate sometimes we we first prepared remarks, in we of just the the come saw ago, impact yes, into the now, we are QX that were which seeing demand those the and I as into half where we a over year back challenges XXXX. a if into the And our takes would or the And as of the grow business at year due back to look in we the from incident. In expect accelerating get of some

John Pagliuca

point that Yes, and, things to just John some is mentioned. -- Mike, -- back add the this I and of to that

are better was that with with even optimizing We QX. starting going performance some there. performance see the seeing as better better rebrand. of we're gen, we're performance as momentum demand to the with Part search and we're are our we to strong we continue website, into seeing seeing build, the And

Mike Cikos

three feel on that sustainable touching innovation the success be all research environment feels a to on get is to data the Because last It you one of the follow-up, have because robust it's back I'm is know those, you for platform. you one guys. -- if guess I'm we And remind the and better of trying That's guess there now the at, things demand down great, thanks. And feel you. back for How we for market partner really three really coming like I international is? investments, when would sense. are looking that's further guys things the investments, seeing one in could I at on security really that us we're the the road for to looking I big are this you that are are driving you it it's do quarters. and know I spoken protection, to you And

John Pagliuca

Sure, you're perfect. the and right, initiatives framing way you growth was and yes, did it appreciate you

seeing the see where So, the remarks, it were of partner see sales of already. business is opportunities it's it's shoots lot green partner times are and We've number with really our what a green that technological MSPs, of question. our investing a business conversations we're starting in to bringing XXXX your been those with success And prepared not came solution. them then shoots examples goes a but -- success, a we there. having in international are, problems which last the to solution also The really investing -- throughout solution, from to and A listening right lot expand and are initiatives with their starting necessarily marketing, a one. solution and these

looking So, security midmarket growth need when their and that them look are we're with help at we at strategy, enterprises they grow to enterprise. this and we mindful layered And their ways at MSPs small-medium small-medium MSPs enterprise approach. finding wallet their share really

SME a tremendous add but to also customers new MSPs an a to an event of get to layer. business, for conversations we cyber I security my to now to is security That's of layered this successful. the They're So, inconvenience need willing had before is what with that giving aware, the more these look, and to these the be to And of companies, add extinction saying, the They right incident business MSPs with posture. is enterprises. book additional That's the protection having invest. data these SMEs, and an the hey why they're giving N-able these so security with used owners a CEOs this framework closer if collateral, are small-medium both these conversation to to them opportunity approach. these small-medium are EDR you the with companies, have for tools,

there's secure. to protection. continue to put us continuity that's the are need the and EDR, asked guys fast where invest And And on can. protection, our evolve pill no as one these the why unfortunately makes and back help believe are in early that's we on data why you evolve continue and I right bad in filtering. remember, So, we security an to sustainability. to as to innings they their strategies, all incident, preview if continuing we them as endpoint story, here that And on magic on SMEs MSPs with then about we as far keep our secure. solutions in going these there the is hands are to we of this are get And as DNS

are and We sure going need a innings they their to not data and extinct. offerings, layered continue or, to businesses because to invest protection complete security worse, in approach different that is early it making interrupted are

Operator

Edward Magi, Berenberg.

Edward Magi

strong a on quarter. Congrats

a your expansions use automation You key here? automation contract few offerings a deeper these of we you Thanks? little understanding the of term dig noted guys capabilities a were Can win. the just wins when of the you better reasons one and into the capabilities key automation of mean what for your in that get to little

John Pagliuca

that a it's And buzzword throw I little around sometimes feel folks too it's Yes, loosely. great bit a question. a

that we -- have and market. allows platform automation geared of more scripts. an that the in have end So, the In one an of high-end a RM more little geared leverage have that's our the we MSPs the to we market towards platforms platforms, platform RM both is both towards low of bit

forms two of two So, that like are shelf forms. power in -- these comes a in comes it times it -- lot scripts and

library, scripts them to they plug can allows it And a We think allows a or them it of this in library it and an library have effectively, tasks they of leverage they're off actually a platform host and the mundane that own of themselves, greatly whether be that scripts. doing. MSP reduce from whole script or pull our that that or like it we the they workbench a them be eliminate a give can that -- craft whether write their what do, or to --

a labor. can to that is they're need the are an do -- if write MSP there cost are they So, updates if number checks they what doing, script. one that And that for the does there

our their Does that script that or if their time less script manage less an staring That they automation is an run deploy less stuck across more so, or at mundane help? And of entire carry them set and screen, customer write can can labor, month MSP and can next -- it the the is less a take that that a them, help now lever themselves. they with they have more through and man-hours, we to profitability. go it now that doing estate. automation their script where if and they their are or better next It them ultimately be more so don't policy circumstance in technician. quarter to their increasing utilization lowering get dependency the the even estate, decreasing prescribe or tasks, run for or forget They it can power and we also platform overhang, across on script, that whenever across for they script the it can once, results labor presents Or intervention, be profitable. their their and driving want better, driving the human people, down

Edward Magi

there. question. color And that. lot great perhaps another product Great, for vision focused a Thanks

threats? independent You an and importance mail Assure sophistication of MSPs security top that Mail these announced software upon test. Thanks. the result you preventing a Can for security the from email in of SME received assured expand threats and

John Pagliuca

Yes, great question.

database. layer prevalent have is an right all try these we the large more spam the and we additional that's get out Phishing the doesn't of bad are a spam, seeing environments. adding filtering a enormous now an company. midmarket It in they are if to guys So, to attacks or small or enterprise ways one matter by it. And and

solution aggregating, across learning the We where have it mailboxes. collective millions behaviors of is these it it's different mailboxes. And the the taking learning and machine our works is is way all all intelligence

getting marked as course, Of what's spam.

across that So, later, if something marking have blocked. so let's now close that similar someone a small-medium aggregating behavior, if hours putting coming being now similar sees in is type that type Australia we a spam, enterprise are that's of a of America in relatively in North as time, we domain real say that to

or So, have. game, the one with reason highly that is to algorithm we to more filtering of the us rated that scale a scale because And it's it's why continue right. mail is where our filtering there. allows it of And is out be of the kind solutions collective intelligence our this

really filter bigger out of this their And and you So, some the smarter SMEs performance. the is, spam and block to these more the all the the mailbox bigger better sharper your attacks. the gets, can the and the ecosystem, is algorithm engine help your the phishing MSPs

that's of of layered has we're So, key It team quite what with game MSPs. the security and kind name is offering. component our of a for on there the Assure this accomplished Mail the proud

Edward Magi

Thanks there achieving Appreciate and color on Fantastic. congrats the from all me. That is it. that. for

Operator

William Blair. Ader, Jason

Jason Ader

first just steady. Thank seems pretty puts XXX% my are out -- you, look morning. as there you I two good trajectory, What the for and guess the questions takes is on of couple the the improve XX Can a room give I NRR? right now? next And on years? that there's trailing feel Do then trendline any you know months. us it's you to like color NRR

Tim O'Brien

there's really about net sales a When down Happy this motion. really and retention, motion growth think on is on I color Hey, partner few our our Jason. we it's the expansion led I between components breaking and partners' about existing think to the some just focus how And One that our our think we retention it. then success Tim. there. gross to really about algorithm. is more dollar-based give Thanks, base

part some We're from three we retention of fronts. have for opportunity see starting I this the in So, We've on those on seen think improvement all partners past of we of and markets returns gross that are our quarter. improvement the John to managers then to. spoke new that partner seeing our success focus sell is help SMEs. to in success partners' And of investment

them to SMEs going cross-selling which services part and new to added is So, the that's of solutions and it with working we've that partner new Hopefully forward. cloud-to-cloud growth. strong where of the MSPs backup story that our those enabled the part EDR bring to new then with seen with -- helps. revenue is streams offerings market, the color partnering and generate that for other success expansion on And on we've

Jason Ader

it. Got

it's direction improvement. that So, like the the retention standpoint gross a from fair? though it sounds moving of right because in trajectory Is

Tim O'Brien

three would of I or on feel, think on was point opportunity, expansion, and of that all feel been but approved retention. the I kind those say of SME driver, that's we gross the the my services selling fronts, I Yes, there's additional

Jason Ader

etc. And get right kind bit lay little we're as market a improvements hopefully John, vaccination rates, end just to now for of Great. of the the on then, seeing in environment the macro wanted land some MSP you, and of

of why the MSPs, As the to reasons years, some you there like relevant? did the And situation with smaller you're that one that less X.X with strong last where was it larger some Darwinian survived? are seeing the feel basically becoming is think of kind the have the you of about strength MSPs MSPs

John Pagliuca

No, relevant. I are less MSPs don't think becoming the smaller

Let's to it's COVID an back excellent because case. up use

quickly focus by They business. COVID, that? of During had what MSPs existing I to thing. book And on their the do mean right did

really a workforce, from a quarter the created So, their security part went huge customers deal MSPs of with go to Customers their MSPs, company, personal out to from once like customers. MSPs land once talking every not new customers' had to help other had there algorithm any base. day. Well, to to were surface deal just of area using view. computers now is mobilize hybrid or during landing COVID, to new and with customers. growth They a a a the for maybe problem month had point

to so, and for book that's focus the did. helping what MSPs of really landing And customers believe MSPs business, existing I their from the stand best up new the shifted

of seeing of consolidation What we're from bit. relevance. a saw end and adding by little of talk low that a up. a macro book you'll went view closer, -- view, getting did because I'll their rates growing SMEs, a and their retention the But second see point what mean? their about from business point We part the more new services in equation, them adding slowed new So, the of

labor larger On seeing hitting just hitting the scarcity, and into opportunities it's shortage for hitting there's walking walking help companies. MSPs MSP scarcity SME, just MSPs because the they're doors it's the not labor larger. MSPs publicly -- are traded the or -- now consolidation MSPs front IT and are the augment shops we We're not global is labor market, of the seeing hitting market, for larger are where these to departments. getting larger companies, the internal and it's into

So, this is IT co-managed of becoming concept of trend. more and more a

part issue. department. a Because department, MSPs taking Why? IP labor on are being scarcity IT seeing there's internal internal of We key an of an aspects

So, doing? or would lower creating land large SMEs midsize what to call what VSMEs more traditional that the are for we it into opportunities, stepping larger is the the opportunity market. an in If MSPs and up MSPs is the these

So, I'm quite bullish. overall

we're more labor in of a health leveraging too, We're because automation they automation. smaller three-person is having seeing of can but profitable a strong leverage and our right? to strong. the our think high-end, shops consolidation, scarcity well are MSP I a seeing with become seeing good the and a the also issue thriving They're number shop, I'm do they industry doing how of lot less? They it

Jason Ader

Great quick one final one. and

the business? of help better to this customers? worse. just security, complexity labor -- soon. just MSPs get result their you it's in macro on help of in a your XXXX? that probably understand this how these lot impact going how does do particular, like on equipping are shortage you in in not us to seems getting The labor It How anytime Just issue not your the And business shortage it's acceleration

John Pagliuca

But MSPs ability the talked call. of it consider good the consider areas. to We tailwind. it opportunity look devices. tailwind our Apple also MSPs help that give and to of a couple amount an in about Windows a to our different I just as depth and right breadth monitoring. a on automation devices, We You're a this at we monitor

XX,XXX at Microsoft themes. or believe we'll our ability win With what again, the more our concept the why of giving vendor we news are help the our overall as look less, long the MSPs that strategy across them that's our game. And healthy the them And allowed parts by MSPs more MSPs give seeing to way, which to the for the that platform and that's equal partner our done is. also their is that of Jason, to is where increase ecosystem. of collective the see it's do we've seeing sharpen is investment we And leveraging bit we're more in and technology are partner and doing success that's them, need EBITDA, we and little the up And we because we them their with integration is the big less, tools -- intelligence with we've good one business. -- with a

that's MSPs and seeing of the going turn book customers, leveraging business their point are expanding an their with accounts is us, base from a for into customer a profitable more view, of good We in end ecosystem larger automation, which creating thing. obviously,

So, that I scarcity. dealing the more it companies you, leave that believe also agree are it. a N-able I with both is who are way the I and with labor would tailwind MSPs I these guess, is servicing for

Operator

Montreal. of Bank Bachman, Keith

Keith Bachman

current of done December competition, June quite your market. versus out the you was a bit dollar-based should bit market, are work larger a is the and how that about perhaps play in talk in is rates net how for vendors the and the some very of we or could And clarification in the was to particular? about question. question, quarter on hoping break less and B, had I it thinking Thanks your think with we in perhaps of big pure Clarification, what the much. on September. A, picture, on a down then the expectations, have quarter just technology your and for dollar-based it Microsoft of normalize then, on help June some And Azure capabilities about talk trying I be how implications positioned to the retention current backup FX their you're I'm you both the net The quarter? backup the about into, [indiscernible] there? the Microsoft should I a quarter, retention. others be could platform not thinking workplace what

John Pagliuca

other portfolio. leveraging we'll and then tool. data first our We protection backup So, Thanks, one internal land RMM departments larger and offering there? offering, backup MSPs one second -- Keith, Sure. of data we the in cross-sell the that new our offering into protection either and both any why and are MSPs IT our with and and the and platforms, from we offerings is frankly the our go answer faster growing so don't backup and of backup

cross-sell customer a great new acquisition. it's that So, continued our offering have success our we and success in tremendous found motion in

more of hardware So the are it more on to to backup and compared the based we've it elected still algorithm are the why? technology, to a is faster, dependent appliance. of to which in cost-effective on Well, some efficient efficient that and we really do cloud the restore solution. our efficient, And a our SME, bandwidth, in completely to allows efficient right? competitors more the It's piece our just more more be MSP,

So, based tech. it kind a the we lot out more image-based are the of there as I believe not that that that relates gives of us that wins And offerings competes we're we but on fact to also have advantage. an think older are of not only offering an an

are So, And to the hasn't Now key Office one moved. now right? critical framework, changed, restore. of ability need cloud, the the market and and XXX. it's and That more just backup of evolving, the every folks workloads that's are MSPs. pushing more more a it's for MSPs. to It their to more that offering It's as using part MSP that's the a is pillars is NIST

pretty as offering, point, the like which ability XXX a really in Office tailwind uptick their effectively XXX, to Office we're our the So, And a going protection puts tremendous and data head doing. SharePoint, our our ability a their allows their enterprises backup It's at seeing up environments to to because approach. belt restore. low-cost us back small-medium a and would Teams of suspenders ability -- lot backup say, a what folks above Not shoulders are to business. I forward restore,

instances. and built, is our the so MSPs. technology for of is the XXX that I machines, it's allow virtual are strong protect I more Office our cloud, our think a instances it's MSPs to servers, fact And efficient think workstations, way in it We platform, play. the inside backup a that add

them view. and one else platform platform I'm the one in from anyone we So, a that whole breadth give spectrum, not sure has

Tim O'Brien

probably least now XXXX, add the next to Keith, FX. rates the I in a on months, If they over the over color at or forward. can't of were as Hey, months, it X. or XX we just are they as I go trailing don't half XX FX future, back tailwind of look if it just will where headwind the where net to some I look relates a most of predict at a bit I little first retention range a of to point of know course would of to the the over but compared where go lead bit there's a

Operator

further At remarks. this hand back questions. I'll any management for time, we further have no to over

Howard Ma

showing Thank and our their in from N-able. calling We appreciate all side. That’s you. everyone in interest

Operator

you you joining thank has your for may call. today's We concluded The call lines. and disconnect now now

N-able (NABL) 9 Nov 212021 Q3 Earnings call transcript